Chapter 01: Introduction to Cost Accounting
IM 1
Multiple Choice Questions
1. (LO.1) Select the incorrect comparison between financial and management accounting:
a.
b.
c.
d.
Primary focus
Overriding criteria
Information timeframe
Recordkeeping
Financial Accounting
External
Verifiability
Historical
Formal
Management Accounting
Internal
GAAP
Current/future
Formal and informal
2. (LO.1) Oversight of auditing standards for public companies is the responsibility of the
a.
Public Company Accounting Oversight Board.
b.
Securities and Exchange Commission.
c.
Financial Accounting Standards Board.
d.
Institute of Management Accountants.
3, (LO.1) The acronym IASB stands for
a.
Internal Accounting Standards Board.
b.
Internal Auditing Standards Board.
c.
International Auditing Standards Board.
d.
International Accounting Standards Board.
4. (LO.1) Cost accounting can best be described as
a.
the intersection between financial and management accounting.
b.
a system that meets the informational demands of both financial and management
accounting.
c.
a system that provides product cost information to Internal managers for planning,
controlling, decision making and evaluating performance.
d.
all of the above.
5. (LO.2) Statements on Management Accounting (SMA) are directives on the practice of
management and cost accounting. Select the incorrect statement concerning SMAs from the
following.
a.
SMAs are issued by the Cost Accounting Standards Board.
b.
SMAs are not legally binding.
c.
SMAs go through a rigorous developmental and exposure process.
d.
SMAs describe high-quality or best practices in management accounting.
6. (LO.7) A management accountant who fails to perform professional duties in accordance with
relevant standards is acting contrary to which of the following standards?
a.
Competency
b.
Integrity
c.
Objectivity
d.
Confidentiality
7. (LO.7) The IMA Code of Ethics requires a management accountant to follow the established
policies of the organization when facing an ethical conflict. When management accountants fail
to resolve an ethical conflict by talking with their immediate supervisor they should
a.
communicate the problem to authorities outside the organization.
b.
contact the next higher managerial level.
c.
notify the audit committee of the board of directors.
d.
contact the chief financial officer.
Chapter 01: Introduction to Cost Accounting
IM 2
8. (LO.7) According to the IMA Code of Ethics a practitioner has the responsibility to recognize
professional limitations. Under which standard of ethical conduct would this responsibility be
included?
a.
Competency
b.
Confidentiality
c.
Integrity
d.
Objectivity
9. (LO.3) Strategic planning includes all of the following except:
a.
top-level management participation.
b.
a long-term focus.
c.
analysis of the current month’s actual variances from budget.
d.
identification of long-term key variables including external influences.
10. (LO.3) The strategy that is being used by a company that seeks to provide superior quality
products or more unique services than its competitors is a
a.
cost leadership strategy.
b.
differentiation strategy.
c.
customer value strategy.
d.
value chain strategy.
11. (LO.4) All of the following are staff personnel except:
a.
production supervisor.
b.
cost accountant.
c.
corporate controller.
d.
tax accountant.
12. (LO.4) An organization’s collection of knowledge, skills, and information is referred to as its
a.
political capital.
b.
qualitative capital.
c.
intangible capital.
d.
intellectual capital.
13. (LO.5) All of the following are examples of upstream functions in the value chain except
a.
supply.
b.
research and development.
c.
production.
d.
design.
14. (LO.6) Which balanced scorecard perspective focuses on those things that the organization must
do well to meet customer needs and expectations?
a.
Customer perspective
b.
Learning and growth perspective
c.
Financial perspective
d.
Internal business perspective
15. (LO.8) Which of the following is a violation of the Foreign Corrupt Practices Act?
a.
Paying cash bribes to foreign officials
b.
Giving sporting event tickets to foreign officials
c.
Providing free samples to the families of foreign officials
d.
All of the above
Chapter 01: Introduction to Cost Accounting
Multiple Choice Solutions
1.
b
2.
a
3.
d
4.
d
5.
a
6.
a (CMA Adapted)
7.
b (CMA Adapted)
8.
c (CMA Adapted)
9.
c (CMA Adapted)
10.
b
11.
a
12.
d
13.
c
14.
d
15.
d
IM 3