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Chapters 1 Through 4
Chapter 1
The Accountant's Role in the
Organization
1)
Management accounting information focuses on external reporting.
2) Cost
management is narrowly focused on a continuous reduction of costs.
3)
Managers always require the information in an accounting system to be presented
in the same format.
4)
Modern cost accounting plays a significant role in management decision
making.
5) The
balance sheet, income statement, and statement of cash flows are used for
financial accounting, but not for management accounting.
6)
Financial accounting is broader in scope than management accounting.
7) Cost
accounting measures and reports short-term, long-term, financial, and
nonfinancial information.
8) Cost
management provides information that helps increase value for customers.
9)
Management accounting has to strictly follow the rules of generally accepted
accounting principles for the purposes
of measurement and reporting.
10) An
ideal database should consist of data that could be used for a single purpose
only.
11) 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.
12) Cost
accounting provides information only for management accounting purposes.
13) Cost
management involves long-term and short-term decisions that attempt to increase
value for customers and lower costs of products or services.
14)
Strategy does NOT specify how an organization matches its capabilities with the
opportunities in the marketplace.
15) All
strategies should be evaluated regarding the resources and capabilities of the
company.
16) The
best-designed strategies are valuable whether or not they are effectively implemented.
17) The
key to a company's success is creating value for customers while
differentiating itself from its competitors.
18) The
key to a company's success is always to be the low cost producer in a
particular industry.
19)
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.
20)
Management accountants should have little or no role in deciding on a company's
strategy.
21)
Companies can decide on an appropriate strategy based strictly on internally
available information.
22)
Strategic cost management describes cost management that specifically focuses
on strategic issues.
23)
Identifying a company's most important customers does not help formulate
strategy.
24) The
best-designed strategies and the best-developed capabilities are useless unless
they are effectively executed.
25) The
supply chain refers to the sequence of business functions in which customer
usefulness is added to products or services.
26) An
effective way to cut costs is to eliminate activities that do not improve the
product attributes that customers value.
27) For
optimal planning success it is best if each business function within the value
chain is performed one at a time in sequence.
28) For
best results, cost management emphasizes independently coordinating supply
chain activities within your company and not interfering with other companies.
29)
Technological innovation has led to shorter product-life cycles and a need to
bring new products to market more rapidly.
30) Key
success factors include cost, quality, timeliness, and innovation.
31)
Customers are demanding increased levels of performance in all aspects of the
value chain and the supply chain.
32) The
value chain describes the flow of goods, services, and information from the
initial sources of materials and services to the delivery of products to
consumers.
33) The
supply chain always occurs within a single organization.
34)
Distribution refers to promoting and selling products or services to customers
or prospective customers.
35) The
production component of the value chain refers to acquiring, coordinating, and
assembling resources to produce a product or deliver a service.
36)
Management accountants might provide information on decisions on whether to buy
a product from outside or manufacture it in-house.
37) Key
success factors are geared to improving customer satisfaction.
38)
Value chain refers to its value to the employee.
39)
Companies have to follow strict guidelines when designing a management
accounting system.
40)
Tracking what is happening in other companies is illegal.
41)
Increased global competition is placing pressure on companies to reduce
costs.
42) The
increasing pace of technological innovation has resulted in longer product life
cycles.
43) A
bottleneck occurs when the work to be performed exceeds the available
capacity.
44) The
first step in the decision-making process is to obtain information.
45) One
of the steps in planning is making predictions about the future.
46) It
is difficult to control activities without a budget.
47) To
take advantage of changing market opportunities, the annual budget should be
strictly enforced.
48) A
budget is a tool used to plan and express strategy.
49) The
process of preparing a budget forces coordination and communication throughout
the company.
50)
Linking rewards to performance is a major deterrent to good management
performance.
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