1 Management accounting is guided by generally accepted accounting principles.

1 Copyright © 2019 Pearson Canada, Inc.

Cost Accounting: A Managerial Emphasis - Cdn. Ed., 8e (Horngren)

Chapter 1 The Accountant's Vital Role in Decision Making

• Explain how management accounting data are essential to the process of rational operating

and strategic decision making.

1) Management accounting is guided by generally accepted accounting principles.

Answer: FALSE

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

2) Managerial accounting and cost accounting both measure and report financial and non-financial information relating to the cost of acquiring or utilizing resources.

Answer: TRUE

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

3) Cost accounting provides information for both management and financial accounting.

Answer: TRUE

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

4) Management accountants are required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users.

Answer: FALSE

Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

Horngrens Cost Accounting A Managerial Emphasis Canadian 8th Edition Datar Test Bank Visit TestBankDeal.com to get complete for all chapters

2 Copyright © 2019 Pearson Canada, Inc.5) Managers typically receive reports on cost planning and controls that should be considered for internal use only.

Answer: TRUE

Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

6) There are three (3) basic business strategies: low cost, premium products, and customer satisfaction.

Answer: FALSE

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

7) Companies with a strategy of low prices compete on their ability to offer unique new products or services that are priced higher than their competition.

Answer: FALSE

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

8) 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

Diff: 1 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

3 Copyright © 2019 Pearson Canada, Inc.9) The key to a company's success is always to be the low cost producer in a particular industry.

Answer: FALSE

Explanation: The low cost producer in a particular industry will not necessarily be successful.Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Understanding

Objective: LO 1-1

10) 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

Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

11) The Global Reporting Initiative (GRI) is a nonprofit organization established to develop guidelines so that reporting on economic, environmental and social performance by all organizations is as routine and comparable as financial reporting.

Answer: TRUE

Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

12) Corporate social responsibility is now mandatory for all publicly traded companies in Canada.

Answer: FALSE

Explanation: Corporate social responsibility (CSR) is the voluntary integration of social and environmental concerns into business decisions.Diff: 2 Type: TF

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

4 Copyright © 2019 Pearson Canada, Inc.13) In what way do managers benefit from the use of a management information system?

• Data can be entered at numerous input terminals within the organization.
• The managers would not be completely responsible for the information that is entered into the

database system.

• The managers could combine or adjust data to answer the questions from particular internal and

external users.

• The managers do not benefit, as the information requires technical expertise to retrieve.
• Managers can store old documents in hard copy.

Answer: C

Diff: 2 Type: MC

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Understanding

Objective: LO 1-1

14) Financial accounting is concerned primarily with

• cost planning and cost controls.
• external reporting to investors, government authorities, etc.
• profitability analysis.
• providing information for strategic and tactical decisions.
• providing analysis to facilitate long term decision making.

Answer: B

Diff: 1 Type: MC

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1

15) The text identifies six ways to classify the major differences between management and financial accounting. The "managers of the organization" is an example of which of the following classes of differences?

• purpose of information
• primary users
• focus and emphasis
• rules of measurement and reporting
• time span and type of reports

Answer: B

Diff: 1 Type: MC

CPA Competencies: Chapter 1 -

3.1.1 Evaluates management information requirements,

3.1.2 Evaluates the types of information systems used and the role they play in an organization,

3.1.4 Identifies ethical and privacy issues related to information technology

Skill: Remembering

Objective: LO 1-1