Copyright 2013 by Nelson Education Ltd. 1a-1

Copyright © 2013 by Nelson Education Ltd. 1a-1 Chapter 1a—Basic Cost Management Concepts

MULTIPLE CHOICE

1.Which of the following is NOT a transformational process in an accounting information system?a.collecting data b.analyzing data c.performance reporting d.summarizing data ANS: C PTS: 1 DIF: Medium REF: p. 3 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 2.Which of the following is NOT a process associated with an accounting information system?a.auditing existing data b.collecting and recording data c.providing information to users d.analyzing and managing data ANS: A PTS: 1 DIF: Moderate REF: p. 3 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 3.What does an accounting information system usually use as inputs?a.financial statements b.data analyses c.performance reports d.economic events ANS: D PTS: 1 DIF: Easy REF: p. 3 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 4.What accounting information subsystem is devoted to providing information for external users?a.management accounting b.financial accounting c.internal accounting d.cost accounting ANS: B PTS: 1 DIF: Easy REF: p. 3 OBJ: 1-1 NAT: AACSB Communication MSC: Remember 5.What is the term for a set of interrelated parts that performs one or more processes to accomplish specific objectives?a.cost objective b.system c.activity d.cost driver ANS: B PTS: 1 DIF: Easy REF: p. 3 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember Cornerstones of Cost Accounting 1e Canadian Edition by Don Hansen (Test Bank All Chapt ers, 100% Original Verified, A+ Grade) 1 / 4

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6.What is financial accounting information NOT used for?a.investment decisions b.regulatory measures c.stewardship evaluation d.costing products ANS: D PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Communication MSC: Higher Order 7.Which of the following is NOT part of the financial accounting information system?a.filing reports with the SEC b.reporting a large contingent liability to current and potential shareholders c.determining the future cash flows of a proposed flexible manufacturing system d.preparing GAAP financial statements ANS: C PTS: 1 DIF: Medium REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 8.Which of the following does NOT describe the cost management information system?a.It evaluates segments or products within the firm.b.It places an emphasis on the future.c.It is externally focused.d.It focuses on the effective use of resources.ANS: C PTS: 1 DIF: Medium REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 9.Which of the following activities is NOT associated with the financial accounting information system?a.reporting on the cost of quality b.reporting to the provincial securities commission c.preparing reports for the CRA d.preparing a statement of cash flows ANS: A PTS: 1 DIF: Medium REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 10.In a company that supplies garlic bread to pizza restaurants, which of the following would be considered an input?a.completed product b.flour c.baking d.labour cost of the baker ANS: B PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Analytic MSC: Higher Order 11.In a company that supplies garlic bread to pizza restaurants, which of the following would be considered inputs?a.flour, garlic, oil b.completed product, garlic, oil c.flour, completed product, oil d.flour, garlic, completed product ANS: A PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Analytic MSC: Higher Order 2 / 4

Copyright © 2013 by Nelson Education Ltd. 1a-3

• In a company that supplies garlic bread to pizza restaurants, which of the following would be considered

a transforming process?

• baking, packaging, mixing
• delivering, packaging, mixing
• baking, delivering, mixing
• baking, packaging, delivering

ANS: A PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Analytic MSC: Higher Order

• In a company that supplies garlic bread to pizza restaurants, which of the following would be considered

a transforming process?

• delivering
• baking
• ordering
• testing

ANS: B PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Analytic MSC: Higher Order

• In a company that supplies garlic bread to pizza restaurants, what would the delivered garlic bread be

considered?

• an interrelated part
• an input
• an output
• a process

ANS: C PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Analytic MSC: Higher Order

• In an accounting information system, which of the following are part of the transformation process?
• creating performance reports, analyzing data, summarizing data
• collecting data, creating performance reports, summarizing data
• collecting data, analyzing data, summarizing data
• collecting data, analyzing data, creating performance reports

ANS: C PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Higher Order

• What is the overall objective of accounting information systems?
• to provide information to users
• to manage the organization
• to prepare financial reports
• to report to the government

ANS: A PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

• In an accounting information system, what usually are the inputs?
• financial statements
• data analysis
• performance reports
• economic events

ANS: D PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember 3 / 4

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• Which of the following is a cost management subsystem designed to assign costs to individual products

and services and other objects, as specified by management?

• financial accounting information system
• operational control information system
• cost accounting information system
• continuous improvement system

ANS: C PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

• Which of the following is a cost management subsystem designed to provide accurate and timely

feedback concerning the performance of managers and others relative to their planning and control of activities?

• financial accounting information system
• operational control information system
• cost accounting information system
• continuous improvement system

ANS: B PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

• What is the term for an accounting information subsystem that is primarily concerned with producing

outputs for external users?

• cost management information system
• computer information system
• internal accounting system
• financial accounting information system

ANS: D PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

• Which of the following would NOT be a benefit of a cost management system?
• increasing speed by ignoring nonfinancial information
• reducing duplicate data storage and use of data
• improving timeliness of reports
• increasing the efficiency of generating reliable and accurate information

ANS: A PTS: 1 DIF: Moderate REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

• What is a major subsystem of the cost accounting information system?
• enterprise resource planning
• operational control information system
• on-line analytical processing
• electronic data interface

ANS: B PTS: 1 DIF: Easy REF: p. 4 OBJ: 1-1 NAT: AACSB Reflective MSC: Remember

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