Managerial Accounting Multiple Choice Question Answer Homework Help
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1. The globalization of business activity has resulted in which of the following?
a. Increased corruption and unethical behavior.
b. The FASB and IASB working jointly on a project to converge accounting standards.
c. The requirement that major Canadian companies use International Financial Reporting Standards.
d. All of the above.
e. b and c.
2. The manipulation of the allowance for doubtful accounts by management would be best indicated by when a company:
a. tightens its credit standards and the allowance account decreases.
b. lowers its credit standards and the allowance account decreases.
c. tightens its credit standards and the allowance account increases.
d. lowers its credit standards and the allowance account increases.
3. The best measure for determining how well a firm operates within its industry is
a. Gross Profit
b. Operating Profit
c. Earnings before Taxes
d. Net profit
4. A change in retained earnings from one year end to the next can result from cash flows related to both operating and financing activities. (True/false)
5. Consider the following statements
I. The cash conversion cycle of a firm can be improved by decreasing the days inventory held and days payable outstanding, while decreasing the average collection period.
II. The DuPont System helps the analyst see how a firm s decisions and activities over an accounting period interact to produce return on equity.
a. Only Statement I is true.
b. Only Statement II is true.
c. Both Statements I and II are true.
d. Both Statements I and II are false.
6. How should a company report total comprehensive income?
a. On the face of its income statement.
b. In a separate statement of comprehensive income.
c. In its statement of stockholders’ equity.
d. All of the above ways are acceptable.
7. Currently, management accounting information within government and nonprofit organizations is in greater demand because:
a. public and private donors are demanding accountability
b. citizens are requesting responsive and efficient performance from their governing units
c. more nonprofit organizations are competing for limited funds
d. All of the above are correct.
8. The measurement of the objectives for the Balanced Scorecard
a. creates focus for the future.
b. communicates an important message to all employees.
c. focuses the entire organization on strategic implementation of company s outcomes.
d. All of the above are correct.
9. The strategy MOST LIKELY to reduce the break-even point would be to:
a. increase both the capacity-related (fixed) costs and the contribution margin per unit.
b. decrease both the capacity-related (fixed) costs and the contribution margin per unit.
c. decrease the capacity-related (fixed) costs and increase the contribution margin per unit.
d. increase the capacity-related (fixed) costs and decrease the contribution margin per unit.
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10.The major reason for using practical capacity as the denominator for activity driver calculations is to:
a. avoid distortions created by the assignment of unused capacity costs to the products produced or customers served.
b. simplify the calculations of the activity cost drivers.
c. reduce the cost of unused capacity.
d. place less emphasis on the cost of unused capacity.
11.An activity-based costing system is most useful when:
a. Operations throughout the plant are fairly similar.
b. There are small amounts of overhead costs.
c. Products produced in the company all show large profits.
d. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
12.Which of the following is NOT an option to transform breakeven or loss customers into profitable ones?
a. Use more discipline in granting discounts and allowances.
b. Improve the process used to produce, sell, deliver and service the customer.
c. Use less menu-based pricing that allows customers to select features and services it wishes to pay for.
d. Improve margins by lowering costs.
13.A performance measurement system should accomplish all of the following except:
a. communicate the company s strategy.
b. motivate employees to achieve strategic objectives.
c. identify financial measures to evaluate an organization s intangible assets.
d. help managers allocate resources to the most productive alternatives.
14.Committed costs are those that the organization agrees must be set aside to cover product costs through the three major stages of the life cycle. (True/False)
15.Budgeting provides all of the following EXCEPT:
a. a means to communicate the organization’s short-term goals to its members
b. support for the management functions of planning and coordination
c. a means to anticipate problems
d. an ethical framework for decision making
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