Accounting Information Systems Review
Questions
Course Introduction
Accounting Information Systems explores the design, implementation, and use of information systems that support accounting functions and financial decision-making in organizations. This course covers the fundamental concepts of accounting data processing, internal controls, systems documentation, computerized accounting systems, and the integration of technology into accounting processes. Students will learn how information systems facilitate transaction processing, generate accurate financial reports, protect data, and comply with regulatory requirements, as well as evaluate the risks and benefits associated with technology in the accounting profession.
Recommended Textbook
Cost Management A Strategic Emphasis 6th Edition by Edward Blocher
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20 Chapters
2503 Verified Questions
2503 Flashcards
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Page 2
Chapter 1: Cost Management and Strategy
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79 Flashcards
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Sample Questions
Q1) Which of the following contemporary management techniques requires a balancing of multiple goals?
A)Target costing.
B)The theory of constraints.
C)Benchmarking.
D)Business process improvement.
E)Enterprise sustainability.
Answer: E
Q2) Corporate management is required to identify and solve problems from a cross-functional view. Instead of viewing a problem as related to a specific business function, management solves these problems by combining skills from different functions simultaneously. This approach is called:
A)Inclusive approach.
B)Integrative approach.
C)Intra-function approach.
D)Multilateral approach.
Answer: B
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Chapter
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Sample Questions
Q1) Over the past several years it has become increasingly important for firms to improve achievement towards their social and environmental responsibilities. What is the best way the management accountant can help the firm improve on sustainability?
A)Participate in programs of environmental organizations.
B)Develop and implement a legal staff and public relations staff for dealing with sustainability issues that may affect the firm.
C)Develop and implement a sustainability scorecard.
D)Risk management.
Answer: C
Q2) SWOT analysis, a valuable analysis tool, stands for:
A)Strengths - Workability - Opportunities - Threats.
B)Strategies - Weaknesses - Opportunities - Threats.
C)Strengths - Weaknesses - Observations - Threats.
D)Strengths - Weaknesses - Opportunities - Threats.
E)Strategies - Weaknesses - Observations - Threats.
Answer: D
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Chapter 3: Basic Cost Management Concepts
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Sample Questions
Q1) Which one of the following is not a type of cost driver?
A)Structural cost driver.
B)Executional cost driver.
C)Volume-Based cost driver.
D)Differential cost driver.
E)Activity-Based cost driver.
Answer: D
Q2) Which of the following would not be considered a cost pool?
A)Inventory manager
B)Revenue
C)Engineering department
D)Direct materials cost
Answer: B
Q3) The total manufacturing cost consists of the costs for materials used, labor, and ________.
A)Overhead cost
B)Average cost
C)Step cost
D)Prime cost
Answer: A
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Chapter 4: Job Costing
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Sample Questions
Q1) Product costing provides useful cost information for all the following except:
A)Both manufacturing and non-manufacturing firms.
B)For non-manufacturing firms.
C)Management planning, cost control, and performance evaluation
D)Financial statement reporting.
E)Identifying and hiring competent managers.
Q2) A time ticket:
A)Shows the time an employee worked on each job, the pay rate, and the total cost chargeable to each job.
B)Shows the time that a department's employees worked on all jobs, the pay rate of each employee, and the total cost chargeable to each job.
C)Shows the time an employee worked on each job and the total cost chargeable to each job only.
D)Shows the time an employee worked on each job only.
E)None of the above.
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Chapter 5: Activity-Based Costing and Customer
Profitability Analysis
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Sample Questions
Q1) Classify each of the following costs as unit-level (U), batch-level (B), product-level (P), or facility-level (F) costs and identify an appropriate example of a possible cost driver for each item:
(1) Parts administration
(2) Production scheduling
(3) Materials handling
(4) Machine operations
(5) Personnel administration and training
(6) Plant security
(7) Machine setups
(8) Engineering changes
(9) Product design
(10) Rent for factory plant
Q2) Using ABC, overhead cost assigned to Job #971 for machine setup is:
A)$2,300.
B)$990.
C)$6,500.
D)$690.
E)$1,020.
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Chapter 6: Process Costing
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106 Flashcards
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Sample Questions
Q1) Backflush costing:
A)Is a simplified approach to determining product cost that is used when there is little or no work-in-process inventory.
B)Involves the use of standard costing.
C)Allows product costs to be quickly and conveniently calculated
D)Is an approach to determining product cost that is used when JIT is used.
E)ALL of the above.
Q2) Many industries, for example mining and other extractive industries, use process costing to provide information regarding sustainability.
Required: Give an example of how a company could use process costing to assist in making decisions regarding sustainability.
Q3) In a process costing system, the cost of abnormal spoilage should be:
A)Prorated between units transferred out and ending inventory.
B)Included in the cost of units transferred out.
C)Treated as a loss in the period incurred.
D)Added to overhead.
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Chapter 7: Cost Allocation: Departments, Joint Products, and By-Products
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Sample Questions
Q1) The amount of joint costs allocated to product L using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
A)$23,438.
B)$33,434.
C)$40,313.
D)$27,109.
E)$11,250.
Q2) Which of the following methods considers all reciprocal flows between service departments through simultaneous equations?
A)Dual method.
B)Step method.
C)Reciprocal method.
D)Direct method.
E)The net realizable value method.
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9
Chapter 8: Cost Estimation
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Sample Questions
Q1) Regression analysis is increasingly being used in business applications, often called "business analytics" (or "predictive analytics"), in which a company studies its customers to gather information that can be used to make each customer more profitable. Companies that do this include Harrah's and eHarmony, among many others.
Required:
(1) Briefly explain how a company could use regression to improve customer profitability.
(2) Do you see any ethical issues involved in the use of business analytics? Explain.
Q2) A range around the regression line within which the management accountant can rely that the actual value of the predicted cost will fall is referred to as:
A)A relevant range.
B)A goodness of fit.
C)A confidence interval.
D)A t-value
E)A p-value.
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Chapter 9: Short-Term Profit Planning:
Cvp Analysis
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Sample Questions
Q1) The degree of operating leverage (DOL) at any given sales volume, X, is useful as:
A)An alternative measure of the breakeven volume.
B)A measure of targeted profit, expressed on a pre-tax basis.
C)A way to estimate fixed costs for an upcoming period.
D)A measure of risk in conjunction with a CVP model.
E)An easy way to perform a Monte Carlo Simulation (MCS) analysis.
Q2) The annual breakeven point, in dollar sales, is calculated to be:
A)$4,800,000.
B)$4,500,000.
C)$4,100,000.
D)$4,600,000.
E)$4,300,000.
Q3) Income taxes have the following effect on the breakeven point calculation:
A)They generally increase the breakeven point.
B)They generally decrease the breakeven point.
C)They have no effect on the breakeven point.
D)They may increase or decrease the breakeven point, depending on the cost structure of the organization.
E)They increase the variable cost per unit.
Page 11
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Chapter 10: Strategy and the Master Budget
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Sample Questions
Q1) A budgeting system that has, in effect, a budget for a set number of periods (i.e., a constant planning horizon) at all times is called a(n):
A)Financial budget
B)Operating budget
C)Rolling financial forecast
D)Capital budget
E)Master budget
Q2) Worton Distributing expects its September sales to be 25% higher than its August sales of $150,000.Purchases were $100,000 in August and are expected to be $120,000 in September. All sales are on credit and are expected to be collected as follows: 30% in the month of the sale and 70% in the following month. Purchases are paid 25% in the month of purchase and 75% in the following month. The beginning cash balance on September 1 is $10,000. The ending cash balance on September 30 would be:
A)$56,250.
B)$56,500.
C)$65,250.
D)$66,250.
E)$76,250.
Q3) Explain benefits of implementing a master budgeting system.
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Page 12
Chapter 11: Decision Making With a Strategic Emphasis
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Sample Questions
Q1) Which of the following items does NOT have to be considered when evaluating a make-or-buy decision?
A)The reliability of the supplier's delivery schedule.
B)Quality of the supplier's product.
C)Net book value of the production equipment used to make the item in question.
D)Contribution margin generated by an alternative use of the production equipment.
E)Financial stability of the supplier.
Q2) Employee morale and social responsibility represent two examples of:
A)Qualitative decision factors.
B)Differential factors.
C)Opportunity costs.
D)Sunk cost expenditures.
E)Relevant costs.
Q3) The direct labor-hour constraint for Harrington's linear program is:
A)A + B + C 150.
B)Min Z = 2A + 2B + 3C.
C)Max Z = 2A + 2B + 3C - 150.
D)100A + 50B + 40C 1,050.
E)2A + 2B + 3C 150.
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Page 13
Chapter 12: Strategy and the Analysis of Capital Investments
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Sample Questions
Q1) The hurdle rate for accepting new capital investment projects is 4%, after-tax. (Note: PV $1 factors for 4%: for 1 year = 0.962, for year 2 = 0.925, for year 3 = 0.889, for year 4 = 0.855, for year 5 = 0.822; the PV annuity factor for 4%, 5 years = 4.452.) At a discount rate of 4%, the PV payback period, in years (rounded to two decimal places) is:
A)2.89 years.
B)3.50 years.
C)3.89 years.
D)4.27 years.
E)More than 5 years.
Q2) Which of the following characteristics is not true of the modified internal rate of return (MIRR)?
A)Unlike IRR, MIRR does not consider the time value of money.
B)It focuses on after-tax cash flows, rather than accounting income amounts.
C)It cannot be used reliably to choose between mutually exclusive projects.
D)Its use may not lead to an optimum capital budget.
E)It is complex to compute, if done manually.
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14
Chapter 13: Cost Planning for the Product Life Cycle: Target
Costing, Theory of Constraints, and Strategic Pricing
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94 Flashcards
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Sample Questions
Q1) What price will the company charge if the firm uses cost-plus pricing based on total cost and a markup percentage of 30%?
A)$180.
B)$121.50.
C)$780.
D)$526.50.
E)Some other amount.
Q2) What price will the company charge if the firm uses cost-plus pricing based on absorption cost and a markup percentage of 110%?
A)$445.50.
B)$850.50.
C)$660.
D)$1260.
E)Some other amount.
Q3) A type of strategic pricing based on analytical methods is used to:
A)Optimally determine the best price.
B)Utilize knowledge of the sales life cycle in setting price.
C)More accurately determine life cycle costs as a basis for setting price.
D)Employ improved design methods that reduce cost and improve price.
Page 15
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Chapter 14: Operational Performance Measurement:
Direct-Cost Variances, and the Role of Nonfinancial
Performance Measures
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Sample Questions
Q1) The total standard direct labor hours (SQ) in November for the output produced are:
A)18,720.
B)19,200.
C)20,800.
D)22,400.
E)22,464.
Q2) The cost of PPS in the flexible budget for the number of units manufactured this period is:
A)$259,200.
B)$280,800.
C)$311,040.
D)$324,000.
E)$360,000.
Q3) Another name for the total operating income variance for a period is:
A)Flexible-budget variance.
B)Master (static) budget variance.
C)Sales volume variance.
D)Total income variance.
E)Sales mix variance.
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Chapter 15: Operational Performance Measurement:
Indirect-Cost Variances and Resource-Capacity Management
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Sample Questions
Q1) The variable overhead spending variance in 2013 for Bluecap Co. is:
A)$6,000 unfavorable.
B)$8,000 unfavorable.
C)$9,200 favorable.
D)$11,440 unfavorable.
E)$17,440 unfavorable.
Q2) All of the following choices exist for defining the denominator volume (denominator activity level) for assigning fixed overhead costs in a standard cost system, except:
A)Budgeted capacity utilization.
B)Actual capacity utilization.
C)Theoretical capacity.
D)Practical capacity.
E)Normal capacity.
Q3) The budgeted total factory overhead for the Machining Department is:
A)$617,100
B)$875,000.
C)$883,500.
D)$892,500.
E)$1,050,000.
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Chapter 16: Operational Performance Measurement:
Further Analysis of Productivity and Sales
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Sample Questions
Q1) A firm manufactures 5,000 umbrellas per year. The umbrellas cost $25,000 to manufacture. The firm has an annual overhead cost of $5,000. What is the total productivity of manufacturing umbrellas?
A)0.20 umbrellas/dollar
B)0.20 dollars/umbrella
C)5 umbrellas/dollar
D)0.17 dollars/umbrella
Q2) What is the firm's total sales quantity variance?
A)$0.
B)$3,500 unfavorable.
C)$4,000 favorable.
D)$37,500 favorable.
E)$50,000 favorable.
Q3) A selling price variance is:
A)Further divided into separate sales quantity and sales mix variances.
B)Further divided into separate revenue and quantity variances.
C)Not further divided.
D)Further divided into separate flexible budget and sales volume variances.
E)Further divided into separate variable and fixed variances.
Page 18
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Chapter 17: The Management and Control of Quality
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Sample Questions
Q1) In a typical Cost of Quality (COQ) report, instructor fees for quality training would be classified as:
A)Prevention costs.
B)Retention costs.
C)Appraisal costs.
D)Internal failure costs.
E)External failure costs.
Q2) All of the following approaches can be used to set quality-related performance expectations except:
A)Taguchi quality loss function (QLF) analysis.
B)Six sigma.
C)Goalpost conformance.
D)Absolute conformance.
E)Ideal Performance.
Q3) As noted in the text, a comprehensive framework for managing and controlling quality contains both financial and non-financial performance indicators (metrics). Provide four (4) examples of internal quality metrics and four (4) examples of external (i.e., customer-based) non-financial quality metrics.
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19
Chapter 18: Strategic Performance Measurement: Cost
Centers, Profit Centers, and the Balanced Scorecard
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Sample Questions
Q1) Managers who are risk prone:
A)Seek risky projects that promise some chance of a benefit.
B)Seek risky projects that promise some chance of a high benefit, although the projects may have a risk of low benefit.
C)Seek risky projects.
D)Seek high risk projects that promise some chance of a high benefit, although the projects may have a very significant risk of no benefit.
Q2) Strategic performance measurement is a(n):
A)Accounting system used by top management for the evaluation of SBU managers.
B)System of shared responsibility.
C)Accounting system for determining strategy.
D)System to design and implement the balanced scorecard.
Q3) The balanced scorecard is particularly important in difficult economic times because:
A)Financial measures are even more important.
B)Nonfinancial measures are even more important.
C)Financial measures may be distorted.
D)Nonfinancial measures may be distorted.
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Chapter 19: Strategic Performance Measurement:
Investment Centers and Transfer Pricing
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Sample Questions
Q1) Return on investment (ROI) is the result of multiplying:
A)Return times average investment.
B)Profit times average operating assets.
C)Return on sales (ROS) times asset turnover (AT).
D)Return on assets (ROA) times asset turnover (AT).
E)Margin on sales times return on assets (ROA).
Q2) As noted in the text, the use of market price can be used to set the transfer price associated with interdivisional transfers of goods and services.
Required:
1. What are the primary advantages of using market price as the transfer price?
2. What are the primary disadvantages of using market price as the transfer price?
Q3) Return on investment (ROI) can be directly increased by:
A)Increasing sales.
B)Increasing the minimum desired rate of return (i.e., divisional cost of capital).
C)Decreasing operating assets.
D)Decreasing operating income.
E)Decreasing asset turnover (AT).
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Page 21
Chapter 20: Management Compensation, Business
Analysis, and Business
Valuation
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Sample Questions
Q1) The gross margin percentage for 2013 is (rounded):
A)11.1%
B)12.0%
C)13.5%
D)18.0%
Q2) The inventory turnover ratio for 2013 is (rounded):
A)11.2
B)12.7
C)13.7
D)14.9
Q3) The total amount of the bonus pool for 2013 is:
A)$145,000.
B)$218,000.
C)$141,000.
D)$174,000.
E)$360,000.
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