Accounting Chapter 1 Question Set

ACCT 2031 Chapter 1 Question Set 1) Planning involves which of the following activities? A) Setting goals and objectives for the company B) Overseeing the company's day-to-day operations C) Evaluating the results of operations D) Getting feedback on results 2) When management compares the budget to actual results, which of the following is being fulfilled? A) Directing B) Controlling C) Decision-making D) Planning 3) Which of the following management responsibilities are being fulfilled when management uses feedback to take corrective action on the budgets? A) Directing and planning B) Planning and decision-making C) Controlling and decision-making D) Planning and controlling 4) Which one of the following manager responsibilities encompasses the other three? A) Decision-making B) Feedback C) Planning D) Controlling 5) Using product cost information to determine sales prices is an example of A) controlling, planning, and decision-making. B) directing, controlling, and planning. C) directing, planning, and decision-making. D) controlling, directing, and planning. 6) Using hourly sales reports to determine the level of staffing needed to service customers fulfills which of management's four primary responsibilities? A) Directing, planning, and decision-making B) Directing, controlling, and planning C) Controlling, planning, and decision-making D) Analyzing, directing, and planning 7) Budgets are the way that managers can express their A) plans. B) decision-making. C) control. D) hiring practices. 8) Comparing actual results to budgets is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. 9) Overseeing the day-to-day operations of a company is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. 10) Preparing budgets is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. 11) Evaluating results against the plan is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. 12) Management accounting A) helps managers make decisions. B) is useful for external and internal users. C) creates technical reports that require external audit for verification. D) is the same as cost accounting. 13) The budgetary control function may include evaluating the difference A) between current operating costs and last year's operating costs. B) between budgeted amounts and actual results. C) between the original budget and the final adjusted budget. D) between the historical cost and the current cost. 14) What are the four primary responsibilities of managers as described in Chapter 1? Give an example of each type of responsibility. 1- Planning: increasing 20% of the revenue 2-Directing: setting a menu for private party at a restaurant 3-controlling: comparing budgeted sales with actual sales 4-decision-making: take an action based on business data for future Match the following: A) Decision making B) Controlling C) Planning D) Directing 15) Setting goals and objectives. C 16) The process in which management engages while it plans directs and controls operations. A 17) Evaluating results of business operations. B 18) Determining how to achieve company goals. C 19) Overseeing the company's day to day operations. D Match the following: A) Controlling B) Planning C) Directing D) Decision making 20) Setting a 20% increase in sales as goal for the next fiscal period. B 21) Streamline company procedures to reduce the time required per unit of product produced. C 22) Selecting the best corporate website design from a number of proposals. 23) Monitor both voluntary and involuntary employee turnover. D A 24) Making a determination about the appropriate level of advertising expenditures. 25) Increasing marketing efforts. D C 26) Implement an employee training program to improve moral. 27) Setting a target level of employee turnover. C B 28) Determine that R & D costs should be increased by 10% in the upcoming fiscal quarter. B 29) Set prices at a competitive level. C 30) Improve the design of the corporate website. C 31) Monitor web traffic through the use of an online counting device. A Distinguish financial accounting from managerial accounting. (T/F) 1) The design of a management accounting system should consider how reports affect employees' behaviour. T 2) International Financial Reporting Standards (IFRS) must be followed when managerial accounting reports are prepared. F 3) Accounting Standards for Private Enterprise (ASPE) must be followed when managerial accounting reports are prepared. F 4) Management accounting requires independent audits of the firm's books. F 5) The primary purpose of managerial accounting information is to help external users make investing and lending decisions. F 6) The primary users of managerial accounting information are internal users such as managers. T 7) The primary managerial accounting product is the company's audited financial statements. F 8) Managerial accounting information emphasizes relevance, more than reliability and objectivity. T 9) Managerial accounting information tends to report on segments of the business. T 10) Managerial accounting reports are always prepared on a quarterly and annual basis. F 11) Managerial information is always based on historical transactions with external parties. F 12) Employee behaviour is one of the factors that must be considered when designing the managerial accounting control system. T