69 Test Bank for Introduction to Management
Accounting 15th Edition
by Horngren
Multiple Choice QuestionsA(n. ________ is a review to determine whether the policies and
procedures specified by top management have been
implemented.
1.

A. management audit

2.

B. internal audit

3.

C. internal control

4.

D. internal accounting control

________ information helps managers focus on operating
problems, imperfections, inefficiencies and opportunities.
1.

A. Scorekeeping

2.

B. Attention directing

Research and development is the function of a value chain that
involves ________.
1.

A. the detailed design and engineering of products, services or processes

2.

B. the generation of ideas related to new products, services or processes

3.

C. the generation of ideas related to new products or services

4.

D. the detailed design and engineering of new processes

When does a company earn the majority of revenue for a product
that goes through the product life cycle?
1.

A. phase-out of product and introduction to market stages

2.

B. introduction to market and mature market stages

3.



2.

B. Management accounting prepares detailed reports whereas financial
accounting prepares summary reports.

3.

C. Management accountants are constrained by the principles of reporting
promulgated by the Institute of Management Accountants whereas financial
accountants are constrained by Generally Accepted Accounting Principles.


4.

D. Behavioral considerations are of primary importance in management
accounting, but not in financial accounting.

Variances ________.
1.

A. are quantitative expressions of plans of action

2.

B. ignore areas that are problem areas

3.

C. are deviations from a plan


B. attention directing

3.

C. problem solving

4.

D. auditing

One advantage of the management-by-exception approach is that
it ________.
1.

A. frees managers from needless concern over operations that adhere to
plans

2.

B. allows managers to ignore aspects of the business outside their area of
expertise

3.

C. allows managers to ignore day-to-day operations


4.


features of products or services

3.

C. selling activities and delivery activities

4.

D. selling activities and customer service

________ is (are. the accounting system's effect on the behavior
and the decisions of managers.
1.

A. Simplicity

2.

B. Behavioral implications

3.

C. The cost-benefit balance

4.

D. The code of ethics

Which of the following statements is FALSE?
1.

3.

C. companies to maintain their accounting records in reasonable detail and
accuracy

4.

D. companies to prepare a separate report on their system of internal
control

During the product development stage of the product life cycle,
companies typically experience ________.
1.

A. revenues and no costs

2.

B. costs and no revenues

3.

C. both costs and revenues

4.

D. neither costs nor revenues

The function of the value chain that provides support activities to
the customer is called ________.


4.

D. managerial accountants

________ is (are. the primary consideration in choosing among
accounting systems and methods.
1.

A. Simplicity

2.

B. Behavioral implications

3.

C. The cost-benefit balance

4.

D. Simplicity and behavioral implications

Which stage of the product life cycle has a stable sales level?
1.

A. product development stage

2.



A. is a quantitative expression of a plan of action

2.

B. provides feedback by comparing actual results with planned results

3.

C. includes deviations from planned results


4.

D. ignores areas that are presumed to be running smoothly

Performance reports ________.
1.

A. are quantitative expressions of plans for action

2.

B. provide feedback by comparing actual results with planned results

3.

C. ignore areas that are presumed to be running smoothly

4.


2.

B. Internal auditing

3.

C. Management accounting

4.

D. Financial accounting

________ is the classification, accumulation, and reporting of
data that help users understand and evaluate organizational
performance.
1.

A. Scorekeeping

2.

B. Attention directing


3.

C. Problem solving

4.

B. attention directing information

3.

C. problem solving information

4.

D. auditing information

Generally Accepted Accounting Principles are most closely
connected to ________.
1.

A. management accounting

2.

B. financial accounting

3.

C. internal auditing

4.

D. management accounting

Which of the following activities would NOT be called
scorekeeping?


D. none of the above

The various stages through which a product passes are called the
________.
1.

A. value chain

2.

B. product life cycle

3.

C. performance plan

4.

D. product performance plan

Which of the following items should be considered by managers
when designing accounting systems?
1.

A. cost-benefit balances

2.

B. behavioral implications

A. do not pertain to services offered to customers

2.

B. are the same length for all products

3.

C. are not important when predicting revenues from a product

4.

D. must be considered to effectively plan and control production of goods or
services

69 Free Test Bank for Introduction to Management
Accounting 15th Edition by Horngren Multiple Choice
Questions-Page 2
Which credential is associated with independent auditors?
1.

A. CMA

2.

B. CPA

3.

C. CFP

the standard of credibility requires ________.
1.
2.

3.
4.

A. mitigating actual conflicts of interest
B. maintaining an appropriate level of professional expertise by continually
developing knowledge and skills
C. communicating information fairly and objectively
D. performing professional duties in accordance with relevant laws,
regulations and technical standards

This is a statement from the IMA's Statement of Ethical
Professional Practice: "Each member has a responsibility to
communicate information fairly and objectively." This is an
example of the ________ standard.
1.

A. competence

2.

B. confidentiality

3.

C. integrity


accordance with the guidelines offered by the IMA, which of the
following courses of action should NOT be taken?
1.

A. Follow the organization's established policies on the resolution of ethical
conflict.

2.

B. Discuss the issue with your immediate supervisor.

3.

C. Consult your own attorney.

4.

D. Initiate a confidential discussion with an IMA Ethics Counselor.

Advertising is an example of the ________ function of the value
chain.
1.

A. distribution

2.

B. selling

3.


A. Rainbow Dry Cleaners


2.

B. Law Firm of Cannon and Dunfy

3.

C. Shoreeast Real Estate Company

4.

D. Irwin Publishing Company

Which statement is FALSE concerning Enterprise Resource
Planning (ERP. systems?
1.

A. Well known ERP system providers are SAP, Microsoft Dynamics and JD
Edwards.

2.

B. Accountants are involved with ERP systems.

3.

C. ERP systems only support a few functional areas of a company.


B. design of products, services or processes

3.

C. customer service

4.

D. none of the above

All service organizations are similar in that ________.
1.

A. there is very little labor

2.

B. output is difficult to measure


3.

C. major inputs and outputs can be stored

4.

D. they are capital intensive

According to the IMA's Statement of Ethical Professional Practice,

B. confidentiality

3.

C. competence

4.

D. professional responsibility

Which company has NOT engaged in accounting fraud in the past
ten years?
1.

A. Enron

2.

B. Tyco

3.

C. Adelphia

4.

D. Smucker Quality Beverages Inc.


According to the Statement of Ethical Professional Practice


C. Both groups prepare information for stockholders and creditors.

4.

D. Both groups rely heavily on other fields such as economics and
behavioral science for analytical tools.

According to the Financial Executive, which of the following
situations create pressures for unethical behavior?
1.

A. emphasis on long-term results

2.

B. upward trends in the economy

3.

C. ignoring small lapses in ethical behavior

4.

D. rising stock prices

A telephone hotline is established for customers to call with
questions about a new electronic device. This is an example of
the ________ function in the ________.
1.

supporting any activity that would discredit the profession

4.

D. each member has a responsibility to monitor subordinates' activities to
ensure compliance with the ethical standard

The IMA's ethical standard of confidentiality does NOT require
each member to ________.
1.

A. keep information confidential except when disclosure is authorized or
legally required

2.

B. inform all relevant parties regarding appropriate use of confidential
information

3.

C. refrain from using confidential information for unethical or illegal
advantage

4.

D. provide confidential decision support information and recommendations
that are accurate, clear, concise and timely

According to the Financial Executives Institute, a function of the

3.

C. production; engineering

4.

D. research and development; design of products, services or processes

You are the management accountant in Company ZZ. A supplier
to Company ZZ offers to let stay rent-free at the supplier's
condominium in Florida for your upcoming vacation. Accepting
the supplier's offer violates the IMA's ethical standard of
________.
1.

A. competence

2.

B. confidentiality

3.

C. credibility

4.

D. integrity

According to the Financial Executives Institute, a function of the

C. B2C transaction

4.

D. C2B transaction

Which of the following is NOT a new direction in business process
management?
1.

A. JIT philosophy

2.

B. XBRL

3.

C. Six Sigma

4.

D. TQM

The largest U.S. association of professional accountants whose
major interest is management accounting is the ________.
1.

A. American Institute of Certified Public Accountants


The Institute of Management Accountants has adopted a set of
standards for ethical conduct which includes ________.
1.

A. competence, integrity, confidentiality and objectivity

2.

B. competence, confidentiality, credibility and objectivity

3.

C. competence, confidentiality, credibility and integrity


4.

D. competence, integrity, morality and confidentiality

The ________ is mainly concerned with the company's operating
matters whereas the ________ is mainly concerned with the
company's financial matters.
1.

A. treasurer; controller

2.

B. controller; treasurer