Ch01cost accounting test bank.doc

Ch01cost accounting test bankCHAPTER 1 THE ACCOUNTANT’S ROLE IN THE ORGANIZATION TRUE/FALSE 1. 2. 3. 4. 5. 6. 7. Management accounting information focuses on external reporting. Answer: False Difficulty: 1 Objective: 1 Terms to Learn: management accounting Management accounting information focuses on internal reporting. A good cost accounting system is narrowly focused on a continuous reduction of costs. Answer: False Difficulty: 2 Objective: 1 Terms to Learn: cost accounting A good cost accounting system is broadly focused to provide information that helps managers at all levels implement, monitor, and evaluate company strategies. Modern cost accounting plays a significant role in management decision making. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost accounting The balance sheet, income statement, and statement of cash flows are used for financial accounting, but not for management accounting. Answer: False Difficulty: 1 Objective: 1 Terms to Learn: financial accounting The balance sheet, income statement, and statement of cash flows are used for financial accounting and also for management accounting. Financial accounting is broader in scope than management accounting. Answer: False Difficulty: 2 Objective: 1 Terms to Learn: financial accounting, management accounting Management accounting is broader in scope than financial accounting. Cost accounting measures and reports short-term, long-term, financial, and nonfinancial information. Answer: True Terms to Learn: Difficulty: 2 cost accounting Objective: 1 Cost management provides information that helps increase value for customers. 1-1 Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost management 8. An ideal database should consist of data that could be used for a single purpose only. Answer: False Difficulty: 2 Objective: 1 Terms to Learn: management accounting An ideal database should be able to be used for multiple purposes. 9. An Enterprise Resource Planning (ERP) System is a single database that collects data and feeds into applications that support each of the company’s business activities, such as purchases, production, distribution, and sales. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: management accounting 10. Cost accounting provides information only for management accounting purposes. Answer: False Difficulty: 1 Objective: 1 Terms to Learn: cost accounting Cost accounting provides information for financial accounting as well as for management accounting purposes. 11. Cost management involves long-term and short-term decisions that attempt to increase value for customers and lower costs of products or services. Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost management 12. All strategies should be evaluated regarding the resources and capabilities of the company. Answer: True Difficulty: 1 Objective: 2 Terms to Learn: strategy 13. The best-designed strategies are valuable whether or not they are effectively implemented. Answer: False Difficulty: 1 Objective: 2 Terms to Learn: strategy Implementation is essential or the strategy is useless. 14. The key to a company’s success is creating value for customers while differentiating itself from its competitors. 1-2 15. 16. 17. Answer: True Difficulty: 1 Objective: 2 Terms to Learn: strategy The key to a company’s success is always to be the low cost producer in a particular industry. Answer: False Difficulty: 2 Objective: 2 Terms to Learn: strategy The low cost producer in a particular industry will not necessarily be successful. Companies generally follow one of two basic strategies: 1) providing a quality product or service at low prices, or 2) offering a unique product or service often priced higher than competing products. Answer: True Difficulty: 2 Objective: 2 Terms to Learn: strategy Management accountants should have little or no role in deciding on a company’s strategy. Answer: False Difficulty: 1 Objective: 2 Terms to Learn: strategy Management accountants should play a significant role in deciding on a company’s strategy. 18. Companies can decide on an appropriate strategy based strictly on internally available information. Answer: False Difficulty: 1 Objective: 2 Terms to Learn: strategy Companies must obtain external information as well as internal information to decide on an appropriate strategy. 19. Strategic cost management describes cost management that specifically focuses on strategic issues. Answer: True Difficulty: 1 Objective: 2 Terms to Learn: strategic cost management 20. The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services. 1-3 。