Financial Management for Non-Financial Managers
Exam Questions
Course Introduction
This course introduces the essential principles of financial management tailored for professionals without a background in finance. It covers the fundamentals of interpreting financial statements, budgeting, forecasting, and cost control, enabling managers to make informed decisions that align with organizational goals. Through practical examples and real-world scenarios, participants learn how to analyze financial data, assess business performance, and communicate effectively with financial experts, empowering them to contribute more confidently to their organizations financial health and strategic planning.
Recommended Textbook
Cornerstones of Managerial Accounting 2nd Canadian Edition by Maryanne Mowen
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14 Chapters
2059 Verified Questions
2059 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which of the following is a characteristic of management accounting?
A) It provides objective financial information.
B) It must adhere to mandatory rules.
C) It has no mandatory rules.
D) Its main users are outside of the organization.
Answer: C
Q2) Management accounting information is used only by manufacturing organizations.
A)True
B)False
Answer: False
Q3) The process of choosing among competing alternatives is decision making.
A)True
B)False
Answer: True
Q4) What does the Triple Bottom Line include?
A) measures of revenues generated by the company
B) measures of activities not simply related to increasing profits
C) measures of activities related to the costs incurred by the company
D) measures of activities related to increasing profits
Answer: B
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Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) Services are intangible and perishable.
A)True
B)False
Answer: True
Q2) Which of the following is characteristic of indirect costs?
A) Indirect costs can be easily and accurately traced to a cost object.
B) Indirect costs are shared between or among more than one cost object.
C) Indirect costs should always be assigned to a cost object.
D) Indirect costs include all labour.
Answer: B
Q3) Assigning costs involves the way that a cost is linked to some cost object.
A)True
B)False
Answer: True
Q4) Cost of goods manufactured represents the cost of direct materials,direct labour,and overhead incurred during the current accounting period.
A)True
B)False Answer: False
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Chapter 3: Cost Behaviour
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Sample Questions
Q1) The cost of advertising is usually a discretionary fixed cost.
A)True
B)False
Answer: True
Q2) Why is managerial judgement critically important in gathering information about costs?
A) It is important in determining cost behaviour.
B) It helps to broaden statistical estimation results.
C) Costs are enhanced by only by new managers.
D) It is necessary to understand revenues.
Answer: A
Q3) An automobile manufacturer changes from using skilled labour to using computer-controlled assembly procedures.What impact will the past data have with respect to costs?
A) Past data is useful in predicting future costs.
B) Past data is of little or no value in predicting future costs.
C) Past data is should be used without adjustments to predict future costs.
D) Past data is representative of future costs.
Answer: B
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Page 5
Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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Sample Questions
Q1) The impact on a firm's income resulting from a change in the number of units sold can be assessed by multiplying the unit contribution margin by the change in units sold assuming that fixed costs remain the same.
A)True
B)False
Q2) By what amount can sales decline before losses are incurred?
A) by the contribution margin
B) by the margin of safety
C) by the degree of operating leverage
D) by the fixed costs
Q3) What formula is used to calculate the degree of operating leverage?
A) contribution margin / profit
B) profit / fixed costs
C) profit / variable costs
D) total sales / profit
Q4) Most firms would like to earn operating income equal to the break-even point. A)True
B)False
Q5) How can a multi-product firm determine its break-even point?
Q6) What are the assumptions underlying cost-volume-profit analysis? Page 6
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Page 7
Chapter 5: Job-Order Costing
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Sample Questions
Q1) When is the predetermined overhead rate usually calculated?
A) at the end of each month
B) at the beginning of each month
C) at the beginning of the year
D) at the end of the year
Q2) Production costs consist only of direct labour and manufacturing overhead.
A)True
B)False
Q3) Which accounts are affected when a job is completed and remains in inventory?
A) raw materials and work in process
B) work in process and finished goods
C) raw materials and cost of goods sold
D) finished goods and cost of goods sold
Q4) Which of the following costs is NOT included on a job-order cost sheet?
A) direct material costs
B) applied factory overhead costs
C) direct labour costs
D) actual factory overhead costs
Q5) What are the three steps of overhead application?
Q6) Discuss overapplied and underapplied overhead.
Page 8
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Chapter 6: Process Costing
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Sample Questions
Q1) Refer to the Figure.What would be the equivalent unit conversion cost for October when using the weighted average method?
A) $5.65
B) $5.83
C) $6.00
D) $6.41
Q2) The document that summarizes the manufacturing activity that takes place in a process department for a given period of time
A)Equivalent units of production
B)Transferred-in costs
C)FIFO costing methods
D)Production report
Q3) Partially completed units can be worked on simultaneously in different processes then brought together in a final process for completion.
A)Parallel processing
B)Sequential processing
C)Process costing
D)Weighted average costing method
Q4) List the five steps in preparing a production report.
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Chapter 7: Activity-Based Costing and Management
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Sample Questions
Q1) What is the term for the process of decreasing the time and resources required by an activity?
A) activity reduction
B) activity sharing
C) activity elimination
D) activity mapping
Q2) Which of the following are setups,material handling,and inspection all possible examples of?
A) product diversity
B) unit-level overhead activities
C) non-unit-level overhead activities
D) sustainable diversity
Q3) Which of the following activity performance measures is concerned with doing the activity right the first time it is performed?
A) time
B) efficiency
C) quality
D) velocity
Q4) What is the activity based costing hierarchy? Give an example for each.
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Chapter 8: Absorption and Variable Costing,and Inventory Management
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Sample
Questions
Q1) Which of the following types of costs does NOT appear on a variable costing income statement?
A) direct materials
B) direct labour
C) opportunity cost
D) variable selling expense
Q2) What is the formula to calculate ordering cost?
A) number of orders per year × cost of placing an order
B) number of orders per year / cost of placing an order
C) average number of units in inventory × cost of carrying one unit in inventory
D) average number of units in inventory / cost of carrying one unit in inventory
Q3) Which inventory cost can include insurance,inventory taxes,and obsolescence?
A) the ordering cost
B) the carrying cost
C) the stockout cost
D) the setup cost
Q4) JIT relies on a push system to control finished goods inventory.
A)True
B)False
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Chapter 9: Budgeting, production, cash, and Master Budget
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Sample Questions
Q1) Refer to the Figure.What is the total overhead budgeted for the month of June?
A) $42,100
B) $80,000
C) $92,100
D) $160,000
Q2) Which of the following statements depicts an aspect of the master budget?
A) The overhead budget is typically composed exclusively of variable overhead.
B) The direct labour budget uses an average wage rate for direct labour.
C) The production budget is converted into dollars.
D) The sales budget includes not stated both units and dollars.
Q3) Monetary incentives include job satisfaction,increased responsibility,and firm recognition of a job well done.
A)True
B)False
Q4) The budget director is the person responsible for directing and coordinating the organization's overall budgeting process.
A)True
B)False
Q5) What are the advantages of budgeting?
Q6) Describe some problems with participative budgeting.
Page 12
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) Refer to the Figure.What is the journal entry to record the issuance and usage of materials?
A) Work in Process 18,900
Materials Usage Variance 675
Materials 19,575
B) Work in Process 19,575
Materials Usage Variance 675
Materials 18,900
C) Work in Process 24,500
Materials Usage Variance 875
Materials 25,375
D) Work in Process 25,375
Materials Usage Variance 875
Materials 24,500
Q2) How are standards developed?
Q3) A favourable usage variance would occur when the actual usage of inputs is greater than the standard usage.
A)True
B)False
Q4) Explain the kaizen approach to costing.
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Refer to the Figure.Suppose that the actual moves made are 80% of the forklifts' capacity.What is the after-the-fact budgeted fuel cost?
A) $9,600
B) $38,400
C) $48,000
D) $153,600
Q2) Which of the following is characteristic of a performance report?
A) It uses static budgets.
B) It compares actual costs with budgeted costs.
C) It usually uses flexible budgets.
D) It does not include variances.
Q3) Responsibility for variable overhead spending and efficiency variances is generally assigned to the purchasing department.
A)True
B)False
Q4) Fixed overhead costs are resources acquired as used and needed.
A)True
B)False
Q5) Define static budget and flexible budget.What is each type used for?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Black Sea Company has two divisions,the Old Division and the New Division.Last year,the Old Division earned $66,000 using average operating assets of $550,000.Last year,the New Division earned $260,000 using average operating assets of $2,000,000.Minimum required rate of return for Black Sea is 9%. A. For the Old Division, residual income is______
B. For the New Division, residual income is_______ Now assume that the minimum required rate of return for Black Sea is 12%. C. For the Old Division, residual income is_______
D. For the New Division, residual income is_______
Q2) The Northern Division of Kenmost Company had income of $50,000,average assets of $350,000,and sales of $250,000.The minimum rate of return for Kenmost Company is 12%. A. What is the margin for the Northern Division?
B. What is the turnover for the Northern Division?
C. What is the ROI for the Northern Division?
D. What is the residual income for the Northern Division?
Q3) Unlike ROI,residual income does NOT encourage a short-run orientation.
A)True
B)False
Q4) What are the advantages and disadvantages of return on investment (ROI)?
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) Refer to the Figure.What is the contribution margin per hour of specialized moulding equipment time for sinks?
A) $33.33
B) $35.00
C) $68.33
D) $70.00
Q2) Which resources can be purchased in the amount needed and at the time of use?
A) lumpy resources
B) flexible resources
C) committed resources
D) product resources
Q3) Which qualitative factor should NOT be considered when evaluating a make-or-buy decision?
A) the quality of the outside supplier's product
B) whether the outside supplier can provide the needed quantities
C) whether the outside supplier can provide the product when it is needed
D) the split-off costs of the product
Q4) What are the six steps of the decision-making model?
Q5) Why does a special-order decision frequently ignore fixed factory overhead?
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) A series of equal future cash flows
A)Payback period
B)Accounting rate of return
C)Net present value
D)Internal rate of return
E)Discount rate
F)Annuity
G)Postaudit
H)Compounding of interest
I)CCA Tax Shield
J)Future Value
K)Discounted cash flows
Q2) An obvious advantage of postaudits is that the assumptions driving the original analysis my often be invalidated by changes in the actual operating environment.
A)True
B)False
Q3) Sometimes firms require riskier projects to have shorter payback periods.
A)True
B)False
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Page 17