162 Test Bank for Managerial Accounting 2nd Edition by
Braun

Multiple Choice Questions-Page 1
A CFO would have all of the following responsibilities EXCEPT:
1.

A. preparing all corporate tax returns.

2.

B. managing corporate financing.

3.

C. providing reports to creditors as required.

4.

D. investing in new equipment.

Which statement is TRUE?
1.

A. Management uses reports created for internal parties.

2.

B. Management uses financial information to plan internal operations.

3.

C. Management uses financial information to analyze costs.

4.

D. All of the above are true.

The person MOST likely to use ONLY financial accounting information would
be the:
1.

A. bank loan officer.

2.

B. plant manager.

3.

C. vice president of plant operations.

4.

D. product manager.


Evaluating results against the plan is an example of the management function
of:
1.


A. controlling.

2.

B. decision-making.

3.

C. directing.

4.

D. planning.

Which of the following is NOT one of the primary responsibilities of
management?
1.

A. Controlling

2.

B. Decision-making

3.

C. Adhering to GAAP

4.


D. Directing

Comparing actual results to budgets is an example of the management
function of:
1.

A. controlling.

2.

B. decision-making.

3.

C. directing.

4.

D. planning.

Using product cost information to determine sales prices is an example of:
1.

A. controlling, planning, and decision-making.

2.

B. directing, controlling, and planning.



3.

C. directing, planning, and decision-making.

4.

D. controlling, directing, and planning.

Which of the following types of accounting is designed to meet the needs of
decision-makers inside a company?
1.

A. Audit accounting

2.

B. Financial accounting

3.

C. Managerial accounting

4.

D. Tax accounting

Which of the following management responsibilities is being fulfilled when
management decides to move production to another country to lower costs?
1.


A. Directing

2.

B. Planning

3.

C. Decision-making

4.

D. All of the above

The vice-president of operations directly reports to which person(s)?
1.

A. The CFO

2.

B. The COO

3.

C. The CEO

4.

D. The Board of Directors



Which of the following statements is FALSE?
1.

A. Financial accounting provides sufficient information for managers to effectively plan
and control operations.

2.

B. Financial accounting reports help creditors make decisions.

3.

C. Financial accounting helps investors make decisions.

4.

D. Financial accounting provides external reports.

Which of the following is TRUE?
1.

A. Managerial accounting reports are audited by CPAs.

2.

B. Managerial accounting reports provide detailed internal information.

3.


C. Managerial accounting reports aid potential investors.

4.

D. Managerial accounting reports must follow GAAP.

Which of the following groups are most likely to use a company’s budget
information?
1.

A. Managers

2.

B. Customers

3.

C. Creditors

4.

D. Suppliers

Preparing budgets is an example of the management function of:
1.

A. controlling.


2.

B. decision-making.


3.

C. directing.

4.

D. planning.

Which of the following types of information are used in managerial
accounting?
1.

A. Financial information

2.

B. Nonfinancial information

3.

C. Forecasts of future earnings

4.

D. All of the above


Which of the following statements is TRUE about managerial accounting
information?
1.

A. It is prepared annually and quarterly.

2.

B. It is audited by CPAs.

3.

C. It emphasizes relevance.

4.

D. It must be prepared in conformity with generally accepted accounting principles
(GAAP).

Reviewing hourly sales reports to determine the level of staffing needed to
service customers fulfills which of management’s four primary
responsibilities?
1.

A. Directing, planning, and decision-making

2.

B. Directing, controlling, and planning


3.

C. Controlling, planning, and decision-making


4.

D. Analyzing, directing, and planning

Planning involves which of the following activities?
1.

A. Setting goals and objectives for the company

2.

B. Overseeing the company’s day-to-day operations

3.

C. Evaluating the results of operations

4.

D. None of the above

Who typically provides oversight for large corporations?
1.


A. Stockholders

2.

B. The CEO

3.

C. The Board of Directors

4.

D. The company president

Owners of a company are its:
1.

A. creditors.

2.

B. customers.

3.

C. managers.

4.

D. shareholders.


Overseeing the day-to-day operations of a company is an example of the
management function of:
1.

A. controlling.

2.

B. decision-making.


3.

C. directing.

4.

D. planning.

Which of the following reports must be audited by an outside agency?
1.

A. Annual financial statements

2.

B. Monthly financial statements

3.


C. Annual financial budgets

4.

D. All of the above

Which of the following groups are external users of financial information?
1.

A. Customers of the company

2.

B. Vendors of the company

3.

C. Potential investors of the company

4.

D. All of the above

Management accounting focuses on:
1.

A. external reporting.

2.


B. internal reporting.

3.

C. tax preparation.

4.

D. auditing.

Which of the following persons or groups would be LEAST likely to receive
detailed managerial accounting reports?
1.

A. Plant managers


2.

B. Current shareholders

3.

C. Sales territory managers

4.

D. CEO


Budgets are the way that managers can express their:
1.

A. plans.

2.

B. decision-making.

3.

C. control.

4.

D. hiring practices.

Information for internal parties about past performance is provided by:
1.

A. budget reports.

2.

B. financial accounting reports.

3.

C. managerial accounting reports.


4.

D. planning reports.

Which of the following are the internal decision-makers of a company?
1.

A. Vendors

2.

B. Customers

3.

C. Managers

4.

D. Shareholders


Which of the following management responsibilities are being fulfilled when
management uses feedback to take corrective action on the budgets?
1.

A. Directing and planning

2.


B. Planning and decision-making

3.

C. Controlling and decision-making

4.

D. Planning and controlling

Who typically manages the daily operations of a company?
1.

A. Stockholders

2.

B. The controller

3.

C. The company’s board of directors

4.

D. The CEO

Which one of the following manager responsibilities encompasses the other
three?
1.


A. Decision-making

2.

B. Feedback

3.

C. Planning

4.

D. Controlling

When management compares the budget to actual results, which of the
following is being fulfilled?
1.

A. Directing

2.

B. Controlling


3.

C. Decision-making


4.

D. Planning

Which of the following certifications is issued by the IMA?
1.

A. CPA

2.

B. CMA

3.

C. CIA

4.

D. CFP

Information for external parties about past performance is provided by:
1.

A. budget reports.

2.

B. financial accounting reports.


3.

C. managerial accounting reports.

4.

D. planning reports.

The primary goal of managerial accounting is to provide information to:
1.

A. shareholders.

2.

B. creditors.

3.

C. internal decision-makers.

4.

D. both shareholders and creditors.

Decision makers inside a company are its:
1.

A. creditors.



2.

B. customers.

3.

C. managers.

4.

D. shareholders.

The primary goal of financial accounting is to provide information for:
1.

A. potential investors.

2.

B. creditors.

3.

C. governmental regulators.

4.

D. all of the above.


Which of following is TRUE?
1.

A. Management accounting focuses on historical transactions.

2.

B. Financial accounting uses the cash basis for recording transactions.

3.

C. Financial accounting focuses on future data.

4.

D. Management accounting focuses on relevant data.

110 Free Test Bank for Managerial Accounting 2nd
Edition by Braun Multiple Choice Questions-Page 2
Which person or group is NOT an employee of a corporation?
1.

A. The CFO

2.

B. A member of the audit committee

3.


C. The Treasurer

4.

D. The VP of manufacturing


An example of the IMA’s integrity standard is to:
1.

A. abstain from engaging in or supporting any activity that might discredit the
profession.

2.

B. communicate information fairly and objectively.

3.

C. keep information confidential except when disclosure is legally required.

4.

D. provide decision support that is accurate, clear, concise and timely .

Performing duties in accordance with relevant laws, regulations, and technical
standards make up which IMA professional ethics standard?
1.

A. Competence


2.

B. Confidentiality

3.

C. Credibility

4.

D. Integrity

You tell your sister that the company you work for is going to report higher
than expected earnings. What ethical standard is being violated?
1.

A. Competence

2.

B. Confidentiality

3.

C. Credibility

4.

D. Integrity


You do not understand how “accrual accounting” works. You have failed
which ethical standard?
1.

A. Competence


2.

B. Confidentiality

3.

C. Credibility

4.

D. Integrity

A company ships out pre-ordered merchandise the last week of December,
instead of in mid-January as originally scheduled, to ensure a profit for the
year. This action could be seen as a violation of what ethical standard?
1.

A. Competence

2.

B. Confidentiality


3.

C. Integrity

4.

D. All of the above

The person or position who is directly responsible for all financial concerns is
the:
1.

A. CEO.

2.

B. CFO.

3.

C. COO.

4.

D. Treasurer.

Which person is hired directly by the board of directors to run the company?
1.


A. The Treasurer

2.

B. The CEO

3.

C. The CFO

4.

D. The COO


You take printer paper home from work for personal use. You have violated
which ethical standard?
1.

A. Competence

2.

B. Confidentiality

3.

C. Credibility

4.


D. Integrity

The COO is responsible for managing which of the following aspect(s) of the
company?
1.

A. Internal controls

2.

B. The annual audit

3.

C. Financial, managerial, and tax accounting

4.

D. Research and development, production, and distribution

A company’s Board of Directors meets:
1.

A. annually.

2.

B. monthly.


3.

C. periodically, as needs dictate.

4.

D. quarterly.

The standards in the IMA Statement of Ethical Professional Practice include:
1.

A. Competence, Confidentiality, Integrity, and Objectivity.

2.

B. Competence, Confidence, Integrity, and Credibility.


3.

C. Competence, Objectivity, Credibility, and Honesty.

4.

D. Competence, Confidentiality, Integrity, and Credibility.

Managerial accountants may be responsible for:
1.

A. analyzing data.


2.

B. communicating results.

3.

C. providing decision support.

4.

D. all of the above.

Who is primarily responsible for raising capital and investing funds?
1.

A. The CEO

2.

B. The CFO

3.

C. The COO

4.

D. The Treasurer


Which would be a subgroup of the Board of Directors?
1.

A. Audit committee

2.

B. Financial committee

3.

C. Managerial committee

4.

D. Stockholders’ committee

Who requires companies listed on the New York Stock Exchange to have an
internal audit function?
1.

A. The Board of Directors


2.

B. The NYSE

3.


C. The internal revenue service (IRS)

4.

D. The stockholders

An example of the IMA’s competence standard is to:
1.

A. abstain from engaging in or supporting any activity that might discredit the
profession.

2.

B. communicate information fairly and objectively.

3.

C. keep information confidential, except when disclosure is legally required.

4.

D. provide decision support that is accurate, clear, concise and timely.

Which of the following report to the audit committee of the Board of
Directors?
1.

A. The treasurer and controller


2.

B. The CFO and internal audit department

3.

C. The internal audit department and the independent CPA firm

4.

D. The CFO and the independent CPA firm

The overarching principles in the IMA Statement of Ethical Professional
Practice include all of the following EXCEPT:
1.

A. fairness.

2.

B. integrity.

3.

C. objectivity.

4.

D. responsibility.



To resolve ethical dilemmas, the IMA suggests that management accountants
should FIRST:
1.

A. follow their company’s established policies for Reporting unethical behavior.

2.

B. discuss the unethical situation with their immediate supervisor.

3.

C. consult an attorney.

4.

D. call the IMA “Ethics Hotline” .

You “pad” your expenses on a company sponsored conference. You are in
violation of what ethical standard?
1.

A. Competence

2.

B. Confidentiality

3.


C. Credibility

4.

D. Integrity

What is the name of the professional association for managerial
accountants?
1.

A. Association of Management Accountants

2.

B. Institute of Management Accountants

3.

C. Institute of Professional Accountants

4.

D. Professional Accountants Association

Which of the following is NOT one of the IMA’s overarching ethical
principles?
1.

A. Honesty



2.

B. Fairness

3.

C. Creativity

4.

D. Responsibility

Managerial accountants often work on teams called:
1.

A. audit teams.

2.

B. cross-functional teams.

3.

C. multi-functional teams.

4.

D. workgroups.


What has been the determining factor in the way that we now view managerial
accountants?
1.

A. Stricter audit standards

2.

B. Stricter GAAP standards

3.

C. Technology

4.

D. None of the above

Preparing financial statements in accordance with GAAP is an example of:
1.

A. competence.

2.

B. integrity.

3.


C. objectivity.

4.

D. credibility.


The person or position who is directly responsible for the company’s
operations, such as research and development, production and distribution is
the:
1.

A. CEO.

2.

B. CFO.

3.

C. COO.

4.

D. Treasurer.

The standards of the IMA Statement of Ethical Professional Practice include
which of the following?
1.


A. Integrity

2.

B. Honesty

3.

C. Fairness

4.

D. Objectivity

Managerial accountants perform which of the following tasks?
1.

A. Ensure financial records are correct

2.

B. Help design information systems

3.

C. Provide decision support

4.

D. All of the above


Which of the following is NOT one of the IMA’s credibility standards?
1.

A. To communicate information fairly and objectively

2.

B. To disclose all relevant information


3.

C. To disclose deficiencies in internal control

4.

D. All of the above are part of IMA’s credibility standard

An example of the IMA’s confidentiality standard is to:
1.

A. abstain from engaging in or supporting any activity that might discredit the
profession.

2.

B. communicate information fairly and objectively.

3.


C. keep information confidential except when disclosure is legally required.

4.

D. provide decision support that is accurate, clear, concise and timely.

An example of the IMA’s credibility standard is to:
1.

A. abstain from engaging in or supporting any activity that might discredit the
profession.

2.

B. communicate information fairly and objectively.

3.

C. keep information confidential except when disclosure is legally required.

4.

D. provide decision support that is accurate, clear, concise and timely.

Which of the following skills are required of managerial accountants?
1.

A. The ability to work on a team


2.

B. Analytical skills

3.

C. Oral and written communication skills

4.

D. All of the above


Communicating information fairly and objectively represents what ethical
standard?
1.

A. Competence

2.

B. Confidentiality

3.

C. Credibility

4.

D. Integrity


The IMA issues what certification?
1.

A. CMA

2.

B. CPA

3.

C. CISA

4.

D. CFP

110 Free Test Bank for Managerial Accounting 2nd
Edition by Braun Multiple Choice Questions-Page 3
Movements toward sustainability and corporate responsibility often:
1.

A. include green initiatives.

2.

B. result in increased demand for the company’s product or service.

3.


C. include monetary support of local schools and charities.

4.

D. do all of the above.


The philosophy and a business strategy of manufacturing without waste is
referred to as:
1.

A. lean production.

2.

B. thin manufacturing.

3.

C. TQM.

4.

D. ISO 9001.

ISO 9001:2008 is a(n):
1.

A. certification that a company complies with international quality standards.


2.

B. software system which integrates all departments.

3.

C. system where production occurs only when needed.

4.

D. effective exchange of information between vendors and customers.

Which is NOT a result of Sarbanes-Oxley?
1.

A. Audit committees must be independent.

2.

B. The COO assumes financial statement responsibility.

3.

C. There are new requirements for CPA firms.

4.

D. There are stiffer consequences for white-collar crimes.


Under Sarbanes-Oxley, companies must have their internal audit procedures
assessed:
1.

A. annually.

2.

B. monthly.


3.

C. quarterly.

4.

D. at any time they choose.

Which of the following describes a system in which suppliers deliver
materials at the time they are needed?
1.

A. ERP

2.

B. JIT

3.


C. TQM

4.

D. ISO

Not disclosing confidential information is an example of which ethical
standard?
1.

A. Competence

2.

B. Confidentiality

3.

C. Credibility

4.

D. Integrity

Which of the following is NOT used in a cost-benefit analysis?
1.

A. Future benefits to be received from project


2.

B. Amounts for future costs of project

3.

C. Book value of past investment in equipment

4.

D. Amount needed to invest in project initially


Which reflects a philosophy of providing customers with superior products
and services?
1.

A. ERP

2.

B. XBRL

3.

C. TQM

4.

D. IFRS


SOX allows CPA firms to provide which of the following services to existing
audit clients, but ONLY if pre-approved by the audit committee?
1.

A. Consulting.

2.

B. Tax

3.

C. Financial information design

4.

D. Bookkeeping

Companies attempt to increase their competitive edge by adopting:
1.

A. green initiatives.

2.

B. lean production.

3.


C. TQM.

4.

D. all of the above.

XBRL is essentially a:
1.

A. new set of accounting standards.

2.

B. new set of auditing standards.


3.

C. a tagging system which allows computer programs to extract information from
financial reports.

4.

D. new set of ethical standards.

Companies that wish to demonstrate their commitment to international quality
standards may become certified by what organization?
1.

A. SEC


2.

B. IFRS

3.

C. IMA

4.

D. ISO

Under Sarbanes-Oxley, what is the maximum number of years of
imprisonment for knowingly destroying or creating documents to obstruct
any federal investigation?
1.

A. 5 years

2.

B. 10 years

3.

C. 15 years

4.


D. 20 years

Taking on a responsibility you know can be better completed by someone
else would violate the ethical conduct standard of:
1.

A. competency.

2.

B. confidentiality.

3.

C. credibility.