Type:
Test Bank
Resource:
Management Accounting
Edition:
4th Edition
Author(s):
Leslie G. Eldenburg Albie Brooks Judy Oliver Gillian Vesty Rodney Dormer Vijaya Murthy Nick Pawsey
Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
Chapter 1: The role of accounting information in management decision making True/false questions 1. A vision statement is a theoretical description of what an organisation should become. *a. True b. False Correct answer: a Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
2. An organisational vision is a short-term plan for maximising financial results. a. True *b. False Correct answer: b Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
3. Most organisations have one stakeholder. a. True *b. False Correct answer: b Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
4. Organisational core competencies unrelated to the organisational vision. a. True *b. False Correct answer: b Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
5. Organisational strategies are the tactics that managers use to take advantage of core competencies while working towards the organisational vision. *a. True b. False Correct answer: a Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
6. Most organisations have databases that contain information collected formally or informally from internal sources only. a. True *b. False Correct answer: b Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
7. Desirable employee behaviour can be motivated by tying employee performance evaluation and pay to long-term or short-term results. *a. True b. False Correct answer: a Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
8. Organisational information systems only collect accounting information. a. True *b. False Correct answer: b Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
© John Wiley & Sons Australia, Ltd 2020
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Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
9. Cost accounting information is used for both management accounting and financial accounting activities. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
10. Management accounting is the process of gathering, summarising and reporting financial and non-financial information used internally to make decisions. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making 11. Intellectual capital is a type of financial resource that is captured by the organisation’s information system. a. True *b. False Correct answer: b Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
12. It is easy to differentiate between internal and external reports. a. True *b. False Correct answer: b Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
13. The design of the management accounting system structure is influenced by both external and internal factors. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
14. Technological advances have allowed management accountants to develop previously infeasible cost and management accounting systems. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
15. GAAP stands for generally agreed accounting practices. a. True *b. False Correct answer: b Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
16. Only large established organisations require a management accounting function. a. True *b. False Correct answer: b Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
© John Wiley & Sons Australia, Ltd 2020
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Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
17. Relevant information helps decision makers evaluate and choose between alternative courses of action. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
18. Recent information system development has focussed on business intelligence and disruptive technologies and innovation. *a. True b. False Correct answer: a Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making
19. Higher quality information is more certain, complete, relevant, timely and valuable. *a. True b. False Correct answer: a Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
20. The use of sophisticated information systems means that uncertainty is eliminated. a. True *b. False Correct answer: b Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
21. Opportunity costs are the benefits forgone when we choose one alternative over the next best alternative. *a. True b. False Correct answer: a Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
22. Cost–benefit analysis means that all decisions will provide a financial benefit to the organisation. a. True *b. False Correct answer: b Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
23. Tuition fees are an opportunity cost of earning a university degree. a. True *b. False Correct answer: b Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
24. High quality information will generally have fewer uncertainties if it is based on viable assumptions. *a. True b. False Correct answer: a Learning objective 1.3 ~ Communicate how managers can make higher-quality decisions using accounting information
© John Wiley & Sons Australia, Ltd 2020
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Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
25. Michael Porter was the first person to apply the generic value chain to the wine industry. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
26. The value chain represents the key activities engaged in by an organisation or industry. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
27. The central feature of the value chain is its focus on activities and processes rather than functions or departments. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
28. A value chain framework ignores customers and suppliers as it requires the organisation to focus on its internal processes. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
29. Value chain analysis can be used in conjunction with other management accounting developments such as activity-based costing and strategic cost management. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
30. Value chain analysis can be used to inform decision such as outsourcing and strategic alliances. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
32. Supply chain analysis is incompatible with value chain analysis as supply chain is only concerned with external suppliers. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
33. Research and development would be considered a downstream activity in value chain analysis. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
© John Wiley & Sons Australia, Ltd 2020
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Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
34. Non-value added activities are unnecessary and wasteful activities that can never be eliminated. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
35. Value chain analysis involves studying each step in the business process and eliminating activities that do not add value. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
36. Cost object is anything that costs are measured for. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
37. The manufacturing division of an oil refinery is an example of a cost object. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
38. Cost objects are the same as cost drivers. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
39. The inputs or activities that cause total costs to increase or decrease are cost drivers. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
40. One way of classifying cost drivers is as structural or equivalent. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
41. Structural costs drivers relate to the underlying economic structure of the organisational. *a. True b. False Correct answer: a Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
42. Total quality management is an example of a structural cost driver. a. True *b. False Correct answer: b © John Wiley & Sons Australia, Ltd 2020
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Chapter 1: The role of accounting information in management decision making Not for distribution in full. Instructors may assign selected questions in their LMS.
Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting 43. A company’s structure, product offerings and value chain design are unrelated. a. True *b. False Correct answer: b Learning objective 1.4 ~ Describe the value chain framework and its applications in management accounting
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Testbank to accompany: Management accounting 4e by Eldenburg et al.
Multiple-choice questions
44. Which of the following influences organisational strategies? a. Tax rates b. Financial statement results *c. Organisational vision d. Number of employees Correct answer: c Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
45. Which of the following statements regarding organisational vision is false? *a. Organisational vision is the same as operating plans. b. Organisational vision is one tool for expressing an organisation’s main purpose. c. Organisational vision should be communicated to all employees. d. Managers sometimes divide the organisational vision into one or more written statements. Correct answer: a Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
46. An organisational vision is sometimes broken down into: I Mission statement II Core values statement III Code of conduct IV Statement of stakeholders a. I only b. I and II only *c. I, II and III d. I, II and IV only Correct answer: c Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation
© John Wiley & Sons Australia, Ltd 2020
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