Ch10 | Full Test Bank – Cost And Management Accounting In

Chapter 10: Cost and Management Accounting in Context

Test Bank

Type: multiple response question

Title: Chapter 10 Question 01

1) Cost accounting is used in organizations to: Please select all that apply.

Heading reference: Cost accounting and cost objects: definitions

a. Determine selling prices for products and services.

b. Make long-term decisions.

c. Calculate product and service costs.

d. Monitor and review outcomes as they happen.

Type: true-false

Title: Chapter 10 Question 02

2) The number of cost objects to which costs can be attached is limited to products, services, centres, activities, customers and distribution channels.

a. True

Heading reference: Cost accounting and cost objects: definitions

b. False

Heading reference: Cost accounting and cost objects: definitions

Type: true-false

Title: Chapter 10 Question 03

3) Costing is micro level, strategy is macro level.

a. True

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

b. False

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

Type: true-false

Title: Chapter 10 Question 04

4) The provision of costing information to managers undermines organizational efficiency and effectiveness.

a. True

Heading reference: Cost accounting and cost objects: definitions

b. False

Heading reference: Cost accounting and cost objects: definitions

Type: multiple choice question

Title: Chapter 10 Question 05

5) Which one of the following is the odd one out?

a. Informing operational decisions.

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

b. Gathering and attaching cost information to cost objects.

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

c. Establishing budgets and standard costs.

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

d. Analysing profitability.

Heading reference: Cost accounting and cost objects: definitions, Management account: a definition

Type: true-false

Title: Chapter 10 Question 06

6) Management accounting is the application of the principles of accounting and financial management to create, protect, preserve and increase value for shareholders.

a. True

Heading reference: Management accounting: a definition

b. False

Heading reference: Management accounting: a definition

Type: true-false

Title: Chapter 10 Question 07

7) Management accounting focuses on the long-term not the short term operations of organizations.

a. True

Heading reference: Management accounting: a definition

b. False

Heading reference: Management accounting: a definition

Type: multiple response question

Title: Chapter 10 Question 08

8) Management accounting is an integral part of management. It requires the identification, generation, presentation, interpretation, and use of relevant information to: Please select all that apply.

Heading reference: Management accounting: a definition, Cost accounting and cost objects: definitions

a. Design reward strategies for executives and shareholders.

b. Safeguard tangible and intangible assets.

c. Measure and report financial and non-financial performance to management and other stakeholders.

d. Accumulate and allocate costs to cost objects.

Type: multiple choice question

Title: Chapter 10 Question 09

9) Which one of the following statements is not true?

a. Financial accounting reports have an internal user focus while management accounting reports are focused on external users of accounting information.

Heading reference: Cost and management accounting v. financial accounting

b. Financial accounting summarizes accounting transactions while cost and management accounting presents a detailed analysis of costs, selling prices and any other information required by an entity’s management.

Heading reference: Cost and management accounting v. financial accounting

c. Financial accounting reports report on what has happened while management accounting reports focus on current activity and future projections.

Heading reference: Cost and management accounting v. financial accounting

d. Financial accounting reports are used by investors to make investment decisions while cost and management accounting reports are used by managers to make business decisions.

Heading reference: Cost and management accounting v. financial accounting

Type: multiple response question

Title: Chapter 10 Question 10

10) Which of the following are descriptions of cost and management accounting? Please select all that apply.

Heading reference: Cost and management accounting v. financial accounting

a. Future focus.

b. Reports on the past and present to inform the future.

c. External user focus.

d. Accounting data at the micro level.

Type: multiple choice question

Title: Chapter 10 Question 11

11) Which one of the following statements is the odd one out?

a. Not designed for planning purposes.

Heading reference: Cost and management accounting v. financial accounting

b. Information with a historical perspective.

Heading reference: Cost and management accounting v. financial accounting

c. Presents summarized accounting information.

Heading reference: Cost and management accounting v. financial accounting

d. A focus on the future.

Heading reference: Cost and management accounting v. financial accounting`````````````

Type: multiple choice question

Title: Chapter 10 Question 12

12) Which one of the following is the odd one out?

a. Information prepared for internal users.

Heading reference: Cost and management accounting v. financial accounting

b. Information summarizing annual accounting data.

Heading reference: Cost and management accounting v. financial accounting

c. Information that is used to make business decisions.

Heading reference: Cost and management accounting v. financial accounting

d. Information that has a forward looking perspective.

Heading reference: Cost and management accounting v. financial accounting

Type: multiple choice question

Title: Chapter 10 Question 13

13) Which one of the following does not describe a feature of cost and management accounting?

a. Used to guide and control operations.

Heading reference: Cost and management accounting v. financial accounting

b. Used to guide an organization to the fulfilment of both long and short term objectives.

Heading reference: Cost and management accounting v. financial accounting

c. Used by external users for investment decision making purposes.

Heading reference: Cost and management accounting v. financial accounting

d. Monitors actual outcomes against budgets.

Heading reference: Cost and management accounting v. financial accounting

Type: true-false

Title: Chapter 10 Question 14

14) The form and content of both financial and cost and management accounting reports are highly regulated.

a. True

Heading reference: Cost and management accounting v. financial accounting

b. False

Heading reference: Cost and management accounting v. financial accounting

Type: true-false

Title: Chapter 10 Question 15

15) Financial accounting reports exhibit a high degree of comparability with the financial accounting reports of other organizations while cost and management accounting reports of different organizations display no such comparability.

a. True

Heading reference: Cost and management accounting v. financial accounting

b. False

Heading reference: Cost and management accounting v. financial accounting

Type: multiple response question

Title: Chapter 10 Question 16

16) Cost and management accounting information should: Please select all that apply.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

a. Faithfully represent what it purports to represent.

b. Be understandable.

c. Be verifiable.

d. Be timely.

Type: true-false

Title: Chapter 10 Question 17

17) Cost and management accounting information is subject to the cost-benefit rule.

a. True

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

b. False

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

Type: true-false

Title: Chapter 10 Question 18

18) Materiality is a fundamental consideration in the preparation and presentation of financial accounting reports. However, materiality has no role to play in the production of cost and management accounting reports as every detail is relevant.

a. True

Heading reference: Materiality, Financial accounting information v. cost and management accounting information: a comparison

b. False

Heading reference: Materiality, Financial accounting information v. cost and management accounting information: a comparison

Type: multiple choice question

Title: Chapter 10 Question 19

19) Which one of the following statements is not true?

a. The cost accounting system is just an extension of the financial accounting system.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

b. Cost and management accounting reports have both an internal and an external focus.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

c. Financial accounting reports present internal information to external parties.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

d. Internal financial costs are the only information that entities require to set the selling prices of products and services.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

Type: multiple choice question

Title: Chapter 10 Question 20

20) Which one of the following statements is not true?

a. Cost and management accounting information is generated as frequently as required.

Heading reference: Cost and management accounting v. financial accounting

b. Accounting is the foundation of strategic and operational decision making.

Heading reference: Management accounting: a definition

c. Financial accounting and management accounting reports derive their financial information from completely diverse sources.

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

d. Costs are the foundation for decision making by management

Heading reference: Management accounting: a definition

Type: multiple response question

Title: Chapter 10 Question 21

21) Cost and management accounting reports: Please select all that apply.

Heading reference: Cost and management accounting v. financial accounting

a. Are produced as frequently as required for the effective management of organisations.

b. Present detailed analysis of costs and selling prices.

c. Are highly comparable with the reports of other organisations.

d. Present information in a fluid format.

Type: true-false

Title: Chapter 10 Question 22

22) As long as management are confident that the output of the accounting system is accurate, cost and management accounting information does not have to meet the enhancing qualitative characteristic of verifiability.

a. True

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

b. False

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

Type: multiple response question

Title: Chapter 10 Question 23

23) Financial accounting reports: Please select all that apply.

Heading reference: Cost and management accounting v. financial accounting

a. Display a high degree of comparability with current and previous reports for the same and other organisations.

b. Are highly relevant for decision making and management purposes.

c. Present the required information in a highly regulated format.

d. Are usually produced annually.

Type: multiple choice question

Title: Chapter 10 Question 24

24) Which one of the following is not a qualitative characteristic of both financial accounting information and cost and management accounting information?

a. Comparability

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

b. Faithful representation

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

c. Relevance

Heading reference: Financial accounting information v. cost and management accounting information: a comparison

d. Understandability

Heading reference: Financial accounting information v. cost and management accounting information: a comparison