Accounting for Managers Test Preparation
Course Introduction
Accounting for Managers provides a comprehensive introduction to the principles and practices of accounting with a focus on the information needs of managers. The course explores financial and managerial accounting concepts, enabling students to interpret financial statements, analyze costs, and use accounting data to guide decision-making. By examining budgeting, performance evaluation, and strategic planning, students learn how to leverage accounting information to improve organizational effectiveness and achieve business objectives. This course is designed for current and aspiring managers who need to understand financial reports, control operations, and contribute to the financial success of their organizations.
Recommended Textbook
Introduction to Management Accounting 16th Edition by Charles T. Horngren
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17 Chapters
2438 Verified Questions
2438 Flashcards
Source URL: https://quizplus.com/study-set/3605 Page 2
Chapter 1: Managerial Accounting,the Business
Organization,and Professional Ethics
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Which statement about TQM is FALSE?
A) TQM focuses on product quality.
B) TQM minimizes costs by maximizing quality.
C) TQM focuses on the prevention of defects and on customer satisfaction
D) Management accountants have no role in the application of TQM.
Answer: D
Q2) You are a management accountant in a large company.You have observed unethical behavior by your immediate supervisor.In accordance with the guidelines offered by the IMA,which of the following courses of action should NOT be taken?
A) Follow the organization's established policies on the resolution of ethical conflict.
B) Discuss the issue with your immediate supervisor.
C) Consult your own attorney.
D) Initiate a confidential discussion with an IMA Ethics Counselor.
Answer: B
Q3) One of a controller's responsibilities is risk management.
A)True
B)False
Answer: False
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Chapter 2: Introduction to Cost Behavior and Cost Volume
Profit Relationships
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) The following information is available for a company: \(\begin{array}{ll}\text { Sales }&\$1,000,000\\
\text { Variable Selling Expenses } & 23,000 \\
\text { Fixed Selling Expenses } & 33,000 \\
\text { Variable Administrative Expenses } & 39,000 \\
\text { Fixed Administrative Expenses } & 10,000 \\
\text { Variable Cost of Goods Sold } & 300,000 \\
\text { Fixed Cost of Goods Sold } & 100,000
\end{array}\)
What is the contribution margin for this company?
A) $500,000
B) $600,000
C) $638,000
D) $700,000
Answer: C
Q2) Gross margin focuses on sales in relation to variable costs.
A)True
B)False
Answer: False
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Chapter 3: Measurement of Cost Behavior
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Sunrise Motel's cost function is given as:
Y = $75,000 + $9.50X
Where:
Y = annual custodial cost
X = number of guest-days of occupancy
In the current year,Sunrise Motel has 8,000 guest days.In the next year,Sunrise Motel expects an occupancy level of 10,000 guest days.(All costs next year will remain in the same relevant range as the current year.)What is the expected fixed custodial cost for next year?
A) $7.50
B) $50,000
C) $62,500
D) $75,000
Answer: D
Q2) A mixed-cost function is graphed as a ________.
A) nonlinear line
B) curved line
C) line with a break for fixed costs
D) straight-line
Answer: D
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Page 5
Chapter 4: Cost Management Systems and Activity-Based
Costing
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) An example of a strategic management decision is the selection of the product mix that maximizes profits.
A)True
B)False
Q2) Period costs become expenses during a future period.
A)True
B)False
Q3) The process of collecting costs by some natural classification is called ________.
A) cost accounting
B) cost allocation
C) cost accumulation
D) cost assignment
Q4) To support managers' decisions,accountants develop cost management systems that are ________.
A) also used by external users such as investors and lenders
B) computer programs with specialized accounting language
C) a collection of tools and techniques that identify how decisions affect costs
D) composed of at least 400 cost pools
Page 6
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Chapter 5: Relevant Information for Decision Making With a
Focus on Pricing Decisions
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Variable administrative expenses affect the calculation of ________ on the contribution income
Statement.Variable administrative expenses do NOT affect the calculation of ________ on the absorption income statement.
A) gross margin; contribution margin
B) contribution margin; gross margin
C) operating income; contribution margin
D) gross margin; operating income
Q2) If perfectly accurate and relevant information is not available for decision making,the accountant should consider using information that is ________.
A) precise but irrelevant
B) imprecise but irrelevant
C) imprecise but relevant
D) imprecise but timely
Q3) What are the qualitative aspects of a decision?
A) those which are not relevant to a decision
B) those with a concrete dollar amount
C) those for which measurement in dollars and cents is difficult and imprecise
D) those which are always relevant to a decision
Page 7
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Chapter 6: Relevant Information for Decision Making With a
Focus on Operational Decisions
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) The following is a useful rule of thumb when making operational decisions.Managers should NOT use ________.
A) variable cost per unit
B) total variable costs
C) fixed cost per unit
D) total fixed costs
Q2) When deciding whether to add or delete a department,managers should keep the department as long as ________ from the department exceeds ________.
A) contribution margin; variable costs
B) contribution margin; common costs
C) contribution margin; avoidable fixed costs
D) contribution margin; unavoidable fixed costs
Q3) ________ are relevant in deciding whether to add or delete a department from a department store.
A) Avoidable fixed expenses
B) Common costs
C) Unavoidable fixed expenses
D) None of the above
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Chapter 7: Introduction to Budgets and Preparing the Master Budget
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/71583
Sample Questions
Q1) Cornell Company is preparing a cash budget for the month of June.The following information is available: \(\begin{array}{ll}
\text { Cash Balance, May 31, } 2014 & \$ 11,000 \\
\text { Cash collections from customers in June } & 43,000 \\
\text { Cash paid for land in June } & 10,000 \\
\text { Patent amortization expense in June } & 5,000 \\
\text { Cash paid for merchandise in June } & 20,000 \\
\text { Cash paid for operating expenses in June } & 20,000 \\
\text { Cash dividend paid in June } & 5,000 \end{array}\)
The minimum cash balance desired is $5,000.What is the deficiency of cash before financing at June 30,2014?
A) $(5,000)
B) $(6,000)
C) $(11,000)
D) $(12,000)
Q2) Managers may lie to increase the resources allocated to their departments.
A)True
B)False
Page 9
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Chapter 8: Flexible Budgets and Variance Analysis
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) In most companies,variances are investigated only if they exceed a minimum dollar amount or percentage deviation from budgeted amounts.
A)True
B)False
Q2) A static budget is prepared for one expected level of activity.
A)True
B)False
Q3) Wetzel Company has actual fixed overhead costs of $14,500.Fixed overhead costs based on the flexible budget and the standard use of the cost driver are $14,400.Actual variable overhead costs are $14,700.Flexible budget costs for variable overhead costs are $15,000.What is the flexible-budget variance for fixed overhead costs?
A) $100 Favorable
B) $100 Unfavorable
C) $300 Favorable
D) $300 Unfavorable
Q4) Differentiate between a static budget variance and a flexible budget variance.
Q5) ......
Q6) A favorable materials price variance may lead to an unfavorable materials usage variance.
Page 10
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Chapter 9: Management Control Systems and Responsibility Accounting
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) The entire firm may be a responsibility center for the firm's president.
A)True
B)False
Q2) Why will management control systems in nonprofit organizations probably never be as highly developed as those in profit-seeking firms?
Q3) In most organizational settings,superior ________ performance usually follows from superior ________ performance.
A) financial; nonfinancial
B) nonfinancial; financial
C) financial; strategic
D) nonfinancial; strategic
Q4) ________ performance measures are often ________ indicators that arrive too late to prevent problems in organizations.
A) Nonfinancial; leading
B) Nonfinancial; lagging
C) Financial; leading
D) Financial; lagging
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Chapter 10: Management Control in Decentralized Organizations
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) The use of net book value for plant assets promotes a more conservative approach to asset replacement when compared to gross book value.
A)True
B)False
Q2) Transfer prices are ________.
A) revenues of the segment producing the transferred product
B) costs of the segment acquiring the transferred product
C) costs of the segment producing the transferred product
D) revenues of the segment producing the transferred product and costs of the segment acquiring the transferred product
Q3) Which of the following types of organizations can use management by objectives?
A) profit-seeking organizations only
B) nonprofit organizations only
C) universities, hospitals and churches only
D) all of the above
Q4) The lower in the organization that authority is delegated,the greater the decentralization.
A)True
B)False
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Chapter 11: Capital Budgeting
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) As the minimum required rate of return increases for an investment project,the net present value of the project ________.
A) increases
B) does not change
C) decreases D) becomes positive
Q2) Two common methods for comparing alternative investments are the total project approach and the conversion approach.
A)True
B)False
Q3) In the NPV method,errors in forecasting terminal disposal values are usually not crucial because the present value of these cash flows is small.
A)True
B)False
Q4) When choosing among several investments,managers should pick the project with the highest net present value.
A)True
B)False
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Page 13
Chapter 12: Cost Allocation
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) Under the traditional approach to cost allocation,the costs in each cost pool are allocated to a product in proportion to the product's usage of the ________.
A) available capacity
B) budgeted capacity
C) cost-allocation base
D) cost pool
Q2) For costs that accountants cannot directly trace to products or services,accountants use ________ or ________.
A) ABC methods; payback method
B) cost-budgeting methods; ignore remaining costs
C) sensitivity analysis; financial planning models
D) cost-allocation methods; leave costs unallocated
Q3) Activity-based costing systems focus on accumulating costs into key activities instead of departments.
A)True
B)False
Q4) Joint costs are not allocated to a by-product.
A)True
B)False
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Chapter 13: Accounting for Overhead Costs
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) The production volume variance is the difference between ________.
A) expected fixed overhead costs and actual fixed overhead costs
B) expected fixed overhead costs and budgeted fixed overhead costs
C) budgeted fixed overhead costs and actual fixed overhead costs
D) budgeted fixed overhead costs and applied fixed overhead costs
Q2) The production volume variance appears when ________.
A) the actual production volume equals the expected production volume used in computing the fixed overhead rate
B) the actual production volume deviates from the expected production volume used in computing the fixed overhead rate
C) the actual production volume deviates from the expected production volume used in computing the variable overhead rate
D) the actual production volume equals the expected production volume used in computing the variable overhead rate
Q3) In practice,proration of overhead variances among the affected accounts is undertaken when it materially affects inventory valuations and net income.
A)True
B)False
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Chapter 14: Job-Order Costing and Process-Costing Systems
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Brother Company prints calendars.All direct materials are added at the inception of the printing process.There were 20,000 units in beginning inventory with a direct material cost of $1,000 and conversion costs of $3,760.
During the month of April,160,000 calendars were started and 144,000 calendars were completed.Direct materials cost $26,000 for the month of April.Conversion costs for the month of April were $20,000.
Ending work-in-process units are 100% complete with regard to direct materials and 40% complete with regard to conversion costs.The weighted-average method of process costing is used by Binding Company.
Required:
A) Compute the equivalent units for materials and conversion costs.
B) Compute the unit costs for materials and conversion costs.
C) Compute the cost of units transferred.
D) Compute the cost of ending work-in-process inventory.
Q2) In job-order costing,the journal entry to record the completion of goods would include a Debit to Cost of Goods Sold.
A)True B)False
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Chapter 15: Basic Accounting: Concepts, techniques, and Conventions
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) The income statement summarizes a company's operating performance ________ and the balance sheet shows a company's financial position ________.
A) at a point in time; over a period of time
B) at a point in time; at a point in time
C) over a period of time; over a period of time
D) over a period of time; at a point in time
Q2) Liabilities are the entity's economic obligations to owners.
A)True
B)False
Q3) Accounting information only helps assess past financial performance.
A)True
B)False
Q4) A multiple-step income statement includes a subtotal for gross profit. A)True
B)False
Q5) Owners' equity represents the excess cash a company has made.
A)True
B)False
17
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Chapter 16: Understanding Corporate Annual Reports: Basic Financial Statements
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Jerome Company reported cost of goods sold of $700,000,a decrease in inventory of $60,000,and an increase in accounts payable of $30,000.How much cash was paid to suppliers?
A) $605,000
B) $610,000
C) $725,000
D) $795,000
Q2) Preferred stockholders receive cash dividends before common stockholders. A)True B)False
Q3) A unit of ending inventory has a cost of $100 per unit.The selling price per unit is $200.The replacement cost per unit is $90.What value is reported for this inventory on the balance sheet?
A) $90
B) $100
C) $110
D) $200
Q4) Gross profit equals sales minus cost of goods sold.
A)True B)False
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Chapter 17: Understanding and Analyzing Consolidated Financial Statements
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Sample Questions
Q1) Naples Company acquired all of the shares of Tampa Company for $80 cash.At the time of the acquisition,the fair values of Tampa Company's assets were $200.At the time of acquisition,the fair values of Tampa Company's liabilities were $120.On the date of acquisition,what is the amount of goodwill on the consolidated balance sheet?
A) $0
B) $20
C) $80
D) $100
Q2) If an investor uses the equity method to account for a long-term equity investment,then the investor records income when the investee reports net income.
A)True
B)False
Q3) When a company owns less than 20 percent of the common stock of another company,the market value method of accounting for investments in equity securities is used.
A)True
B)False
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Page 19