Accounting Information for Decision Making
Textbook Exam Questions
Course Introduction
This course explores the role of accounting information in the decision-making processes of organizations. Students will gain an understanding of how financial and managerial accounting data are used to analyze business operations, assess financial performance, and guide strategic planning. Topics include the interpretation of financial statements, costing methods, budgeting, variance analysis, and the ethical implications of accounting decisions, equipping students with the skills necessary to make informed and effective business decisions.
Recommended Textbook
Fundamental Managerial Accounting Concepts 9th Edition by Thomas P Edmonds
Available Study Resources on Quizplus
14 Chapters
2127 Verified Questions
2127 Flashcards
Source URL: https://quizplus.com/study-set/3705
2
Chapter 1: Management Accounting and Corporate Governance
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/73780
Sample Questions
Q1) Select the incorrect statement regarding costs and expenses.
A) Some costs are initially recorded as expenses while others are initially recorded as assets.
B) Expenses are incurred when assets are used to generate revenue.
C) Manufacturing-related costs are initially recorded as expenses.
D) Non-manufacturing costs should be expensed in the period in which they are incurred.
Answer: C
Q2) What are period costs? How does the accounting for period costs differ from the accounting for product costs?
Answer: Period costs include general,selling,and administrative costs.Period costs are expensed in the period they are incurred.In contrast,product costs are initially recorded as assets,and become expenses in the period that the related goods are sold.
Q3) The sequence of activities through which an organization provides products to its customers is called a supply chain.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Cost Behavior, operating Leverage, and Profitability Analysis
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/73779
Sample Questions
Q1) If managers of a company do not understand the behavior of its costs,they are likely to make poor decisions about the company's operations.
A)True
B)False
Answer: True
Q2) The higher the magnitude of a company's operating leverage,the more benefit the company will receive from a given percentage increase in revenue.
A)True
B)False
Answer: True
Q3) The contribution margin format income statement classifies costs according to their behavior patterns.
A)True
B)False
Answer: True
Q4) How does variable cost per unit behave when volume decreases?
Answer: Variable cost per unit is constant when volume decreases.
Q5) How does total fixed cost behave when volume increases?
Answer: Total fixed cost is constant (does not change)when volume increases.
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Analysis of Cost, volume, and Pricing to Increase Profitability
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/73778
Sample Questions
Q1) Ecco Company has total fixed costs of $5,000,sells a product whose contribution margin is $50 and selling price per unit is $125,and has current sales of $15,000.The company's margin of safety ratio is 20%.
A)True
B)False
Answer: False
Q2) In order to perform cost-volume-profit analysis,a company must be able to identify its variable and fixed costs.
A)True
B)False
Answer: True
Q3) How does the cost-volume-profit model accommodate non-linear costs and revenues?
A) Non-linear costs and revenues are ignored by the model.
B) Inventory levels are segregated into distinct ranges within which a linear relationship is expected to approximate the actual cost or revenue behavior.
C) It is not a problem since non-linear costs and revenues do not exist in practice.
D) None of these is correct.
Answer: B
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Cost Accumulation,tracing,and Allocation
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/73777
Sample Questions
Q1) The first step in cost accumulation is to identify cost objects.
A)True
B)False
Q2) Sometimes,several types of costs are accumulated into a single total for the purpose of cost allocation.This single total is referred to as a joint cost.
A)True
B)False
Q3) Overhead costs include:
A) Direct and indirect costs.
B) Indirect costs only.
C) Direct costs only.
D) Neither direct nor indirect costs.
Q4) A company's total profit can be affected by the method used to allocate joint costs.
A)True
B)False
Q5) Sometimes,volume-based cost drivers are used to allocate fixed indirect costs.
A)True
B)False
Q6) What are cost objects? List examples of cost objects.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Cost Management in an Automated Business
Environment: ABC, ABM, and TQM
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/73776
Sample Questions
Q1) The minimum amount of total quality costs is achieved when the:
A) marginal voluntary expenditures exceed marginal failure costs.
B) marginal voluntary expenditures equal the marginal savings on failure costs.
C) marginal voluntary expenditures are less than the marginal savings on failure costs.
D) none of the other answers are correct.
Q2) Which of the following costs would be most fairly allocated using a volume-based cost driver?
A) Inventory holding costs
B) Property taxes
C) Setup costs for product batches
D) Indirect labor costs
Q3) Which of the following is an appropriate cost driver for electricity used for production equipment in a factory?
A) Machine hours
B) Number of inspections
C) Setup hours
D) Number of units
Q4) List and discuss changes in business practices adopted in recent years by world-class companies.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Relevant Information for Special Decisions
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/73775
Sample Questions
Q1) Western Classics Publishing Company produces updated versions of literary classics targeted for children.Its bookbinding machines are capable of producing 50 books per hour.The unit-related cost of producing books is $2.50,and Western Classics sells its books for $9.50 each.Reading Ready Publishing has asked the company to produce 10,000 copies of a book for $7.50.Western Classics estimates that unit-level costs for the new book will be $3.00,and due to the size of the book,its binding machines will only be able to produce 20 books per hour.Western Classics has a total of 5,000 machine hours of capacity.In addition,to complete the special order,Western Classics will have to purchase an additional special-purpose machine that will cost $8,000.
Required:
Assume that existing demand for Western Classics's children's classics is 230,000 units and that the special order has to be either taken in full or rejected.Prepare an analysis that indicates whether or not the special order should be accepted.
Q2) Select the incorrect statement concerning opportunity costs.
A) Opportunity costs are relevant costs.
B) Opportunity costs are cumulative.
C) Opportunity costs are future-oriented.
D) Opportunity costs are not recorded in the books.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Planning for Profit and Cost Control
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/73774
Sample Questions
Q1) Which of the following cash budget equations is incorrect?
A) Cash payments + cash receipts = cash requirements
B) Beginning cash + cash receipts = total cash available
C) Cash payments + cash cushion = total cash needed
D) Period 1 ending cash balance = Period 2 beginning cash balance
Q2) Would you recommend that a business employ a participative approach to budgeting? Why or why not?
Q3) The budgeting process that involves adding a month to the end of the budget period at the end of each month,thus maintaining a twelve-month planning horizon,is referred to as:
A) participative budgeting.
B) capital budgeting.
C) continuous budgeting.
D) zero-based budgeting.
Q4) The budgeting technique that provides for employee input into the planning process is known as:
A) continuous budgeting.
B) perpetual budgeting.
C) participative budgeting.
D) zero-based budgeting.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Performance Evaluation
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/73773
Sample Questions
Q1) Select the incorrect statement concerning the human factor of performance evaluation.
A) Variances should not be used to single out managers for punishment.
B) Variances must be analyzed carefully to ensure that they are fully understood.
C) Just because a cost variance is labeled as favorable doesn't necessarily mean that the manager should be commended for a job well done.
D) Managers should always be punished for unfavorable variances.
Q2) A benefit of using a standard cost system is that it can boost morale and motivate employees,if properly maintained.
A)True
B)False
Q3) When a comparison of static and flexible budgets shows an unfavorable sales volume variance,the variable cost volume variances will also be unfavorable.
A)True
B)False
Q4) What steps or activities are involved in developing standards for the materials that are used in making a product?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/73772
Sample Questions
Q1) The Electronics Division of Anton Company reports the following results for the current year: \[\begin{array} { l c c }
\text { Reveruses } & \$ & 800,000 \\
\text { Operating expenses } & \$ & 656,000 \\
\text { Operating income } & \$ & 144,000 \\
\text { Operating assets } & \$ & 1,200,000
\end{array}\] Anton Company has set a target return on investment (ROI)of 11% for the Electronics Division.
The Electronic Division's return on investment is:
A) 11.25%.
B) 12%.
C) 66.7%.
D) 18%.
Q2) Contribution margin would be the most important variable in evaluating the performance of:
A) A cost center.
B) A production center.
C) An investment center.
D) A profit center.
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Planning for Capital Investments
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/73771
Sample Questions
Q1) Kerwin Company is considering a purchase of equipment that costs $50,000.If the useful life is expected to be 5 years and Kerwin's required rate of return is 12%,what is the minimum annual cash inflow that the equipment must offer for the investment to be acceptable? (PV of $1 and PVA of $1)(Use appropriate factor(s)from the tables provided.Do not round your intermediate calculations.Round your final answer to the nearest dollar.)
A) $8,929
B) $13,870
C) $12,076
D) $17,623
Q2) Describe what is meant by the time value of money.
Q3) If a company has to pay a given amount of income taxes over the life of a capital investment,managers of the company should seek to pay the taxes as early as possible in the investment's life.
A)True
B)False
Q4) What is the reinvestment assumption,and how does the assumption affect capital investment analyses?
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Product Costing in Service and Manufacturing
Entities
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/73770
Sample Questions
Q1) Select the response that indicates the correct sequence of product cost flows from production to sale.
A) Raw materials, finished goods, and cost of goods sold
B) Cost of goods sold, finished goods, work in process, and raw materials
C) Work in process, finished goods, and cost of goods sold
D) Raw materials, work in process, finished goods, and cost of goods sold
Q2) Jackson Company estimated that its manufacturing employees would work 88,000 direct labor hours during the current year.During the year,its manufacturing employees actually worked 80,000 direct labor hours.Actual manufacturing overhead costs amounted to $344,000.Jackson applies overhead cost on the basis of direct labor hours.The manufacturing overhead account was overapplied by $16,000 during the current year.Based on this information the predetermined overhead rate was:
A) $5.70 per labor hour.
B) $4.10 per labor hour.
C) $4.59 per labor hour.
D) $4.50 per labor hour.
Q3) Product costs are reported on the income statement above gross margin.
A)True
B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Job-Order, process, and Hybrid Costing Systems
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/73769
Sample Questions
Q1) A laundry detergent manufacturer would most likely use:
A) Process costing.
B) Job-order costing.
C) Hybrid costing.
D) Batch-order costing.
Q2) What are hybrid costing systems? Under what circumstances might a company use a hybrid system?
Q3) In a job-order costing system,a separate job cost sheet is maintained for each job in order to facilitate costing.
A)True
B)False
Q4) All of the following are asset exchange events except:
A) Purchase of raw materials with cash.
B) Use of raw materials in production.
C) Cost of shipping goods to customers.
D) Payment of production wages.
Q5) Process costing systems do not distinguish the cost of one unit of product from another.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/73768
Sample Questions
Q1) The Dennis Company reported net income of $50,000 on sales of $300,000.The company has average total assets of $500,000 and average total liabilities of $100,000.What is the company's return on equity ratio?
A) 10.0%
B) 16.7%
C) 12.5%
D) 50.0%
Q2) Darden Company has cash of $40,000,accounts receivable of $60,000,inventory of $32,000,and equipment of $100,000.Assuming current liabilities of $48,000,this company's working capital is:
A) $12,000.
B) $52,000.
C) $144,000.
D) $84,000.
Q3) A limitation of financial statement analysis stems from the discretion of management to choose accounting procedures that cast the best light on the firm's performance.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/73767
Sample Questions
Q1) What kinds of cash flows are reported as financing activities on the statement of cash flows?
Q2) All of the following are additions to net income when preparing the statement of cash flows under the indirect method except:
A) losses on sales of long-term assets.
B) a decrease in accounts payable.
C) a decrease in prepaid insurance.
D) a decrease in accounts receivable.
Q3) Would issuing a mortgage to purchase a building be reported on the statement of cash flows? If so,where would it be reported? If not,why not?
Q4) Frost Company reported a $4,000 increase in dividends payable,a $60,000 increase in retained earnings,and $64,000 in net income during the year.Based on this information,the company must have paid dividends equal to $4,000 during the year. A)True
B)False
Q5) What can cause cash flow from operating activities to be greater than net income from operating activities?
To view all questions and flashcards with answers, click on the resource link above.
Page 16