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117 Cards in this Set
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1. Which of the following does not represents the characteristics of Management accounting? a. Helps in finding out cost of products and control costs. b. Helps in identifying the financial position of the business. c. Measures the operating efficiency of the enterprise. d. Process of determining and accumulating the cost of products or activity. |
b. Helps in identifying the financial position of the business. |
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2. A cost center and a cost unit are the same a. YES. Both are used to ascertain cost. b. NO. Cost center is a section of the business to which costs are charged. Cost unit helps to ascertain cost for a product or service. c. YES. Both are used for cost control.
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b. NO. Cost center is a section of the business to which costs are charged. Cost unit helps to ascertain cost for a product or service. |
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3. Which of the following is true about the behavior of fixed and variable costs? a. Total FC changes with output. b. Total VC does not change with output c. Per unit FC reduces when output increases. d. Per unit VC reduces when output increases. |
c. Per unit FC reduces when output increases. |
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4. Companies are incurring extra costs for providing work from home facilities to employees during the current pandemic. Identify whether these are controllable or non-controllable costs. a. Controllable b. Non-controllable c. We need further information to arrive at a decision as whether a cost is controllable or non-controllable depends on the level of management authority.
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c. We need further information to arrive at a decision as whether a cost is controllable or non-controllable depends on the level of management authority. |
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5. Cost accounting is needed by which type of users? a. Internal users b. External users |
a. Internal users |
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6. What is the roles of management accountant? a. Provide information and accounting reports. b. Assist departments in achieving the organization objectives. c. Responsible for carrying out the task of helping the management. d. All of above |
d. All of above |
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7. The following is the objective of cost accounting except…. a. Ascertainment of cost b. Decision making c. Planning and controlling unit d. Observations |
d. Observations |
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8. Why management of a company need to know the cost of a product? a. To make the products famous b. To determine the GST c. To determine the selling price d. To get profit |
c. To determine the selling price |
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9. Cost is classified into: a. Cost and expense b. Indirect expense and overheads c. Expense and revenue d. Direct cost and indirect cost |
d. Direct cost and indirect cost |
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10. Which of the ff. would not be a period cost? a. Research and development b. Advertising costs c. Direct materials d. Office supplies |
c. Direct materials |
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11. Which of the following would be an example of a direct materials cost? a. Engine on an airplane b. Glue used to build cabinets c. Lubricant used to manufacture a lighting fixture d. Nails used to manufacture a table
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a. Engine on an airplane |
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12. Management accountancy is a structure for a. Costing b. Decision making c. Accounting d. Management |
b. Decision making |
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13. Which of the ff is accurate formula for conversion cost? a. Direct materials Costs + Direct labor costs b. Direct material costs + direct labor Costs + Manufacturing costs c. Direct labor + manufacturing overhead cost d. Direct material cost + direct labor Cost + manufacturing overhead cost + nonmanufacturing overhead cost
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c. Direct labor + manufacturing overhead cost |
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14. The use of management accounting is a. Optional b. Legally obligatory c. Compulsory d. Compulsory to some and optional to others |
a. Optional |
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15. Management accounting assists the management a. Only in control b. Only in planning c. Only in direction d. In planning, direction and control |
d. In planning, direction and control |
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16. The master budget reflects the impact of operating decisions, but not financing decisions. a. True b. False |
b. False |
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17. Budgets can play both planning and control roles for management. a. True b. False |
a. True |
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18. A quantitative plan is a. Budget b. Fund flow statement c. Cash flow statement d. Ratio
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a. Budget |
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19. The total cost tend to change as to level of activity changes a. Period cost b. Variable cost c. Fixed costs d. Change order cost |
b. Variable cost |
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20. It is the process of determining the objectives, evaluating the different alternatives, and selecting among them. a. Directing / leading b. Planning c. Organizing d. Controlling e. Management f. Decision making |
b. Planning |
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21. It is the process of guiding the activities within an enterprise towards the attainment of the common objectives. a. Directing / leading b. Planning c. Organizing d. Controlling e. Management f. Decision making |
a. Directing / leading |
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22. It defined as the effective motivation of men and efficient and effective utilizations of resources for the attainment of predetermined objectives. a. Directing / leading b. Planning c. Organizing d. Controlling e. Management f. Decision making |
e. Management |
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23. It is the process of defining and grouping functions, establishing relationships among them,, and defining authority and responsibility so that company resources may be made use effectively. a.Directing / leading b. Planning c. Organizing d. Controlling e. Management f. Decision making
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c. Organizing |
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24. It the process of tracking the company’s operations, comparing actual figures with budgeted figures and to adopt corrective measures should there be deviations from plans. a. Directing / leading b. Planning c. Organizing d. Controlling e. Management f. Decision making
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d. Controlling |
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25. _________ refers to authority to command, act or decide on different matters. a. Staff authority b. Line authority |
b. Line authority |
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26. Which of the ff. statements is true? a. Management accounting information focuses on external reporting. b. The statement of financial position, income statement and statement of cash flows are used for financial accounting but not for management accounting. c. Financial accounting is broader in scope than management accounting. d. Modern cost accounting plays a significant role in management decision making. |
d. Modern cost accounting plays a significant role in management decision making. |
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27. Management accounting a. Focuses on estimating future revenues, costs and other measures to forecast activities and their results. b. Provides information about the company as a whole c. Reports information that has occurred in the past that is verifiable and reliable. d. Provides information that is generally available only on a quarterly or annual basis.
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a. Focuses on estimating future revenues, costs and other measures to forecast activities and their results. |
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28. Financial accounting a. Focuses on the future and includes activities such as preparing next year’s operating budget. b. Must comply with PFRS (Philippine Financial Reporting Standards). c. Reports include detailed information on the various operating segments of the business such as product lines or departments. d. Is prepared for the use of department heads and other employees.
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b. Must comply with PFRS (Philippine Financial Reporting Standards).
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29. The person MUST likely to use management accounting information is a(an) a. Banker evaluating a credit application. b. Shareholder evaluating a stock investment. c. Government taxing authority. d. Assembly department supervisor. |
d. Assembly department supervisor. |
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30. Which of the following description refers to management accounting information? a. It is verifiable and reliable. b. It is driven by rules c. It is prepared for shareholders. d. It provides reasonable and timely estimates. |
d. It provides reasonable and timely estimates. |
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31. Which of the following groups would be LEAST likely to receive detailed management accounting reports? a. Stockholders b. Sales representatives c. Production supervisors d. Managers
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a. Stockholders |
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32. Which of the following types of information are used in management accounting? a. Financial information b. Nonfinancial information c. Information focused on the long term d. All of the above |
d. All of the above |
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33. Management accounting includes a. Implementing strategies b. Developing budgets c. Preparing special studies and forecasts d. All of the above
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d. All of the above |
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34. Financial accounting is concerned PRIMARILY with a. External reporting to investors, creditors, and government authorities b. Cost planning and controls c. Profitability analysis d. All of the above |
a. External reporting to investors, creditors, and government authorities. |
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35. Financial accounting provides a historical perspective, whereas management accounting emphasizes a. The future b. Past transactions c. A current perspective d. Reports to stakeholders |
a. The future |
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36. ____________produces information that helps workers, managers and executives in organizations make better decisions. a. Government accounting b. Management accounting c. Auditing d. Financial accounting |
b. Management accounting |
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37. ______________ is the recognition and evaluation of business transactions and other economic events for appropriate accounting action. a. Identification b. Analysis c. Communication d. Evaluating |
a. Identification |
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38. _______________ is the quantification of business transactions or other economic events that have occurred or forecasts of those that may occur. a. Accumulation b. External reporting c. Measurement d. Internal reporting
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c. Measurement |
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39. ________________ is a determination of the reasons for the reported activity and its relationship with other economic events and circumstances. a. Analysis b. Measurement c. Evaluation d. Accumulation |
a. Analysis |
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40. Which of the following is a basic feature of a managerial accounting system? a. The scope tends to be highly aggregate. b. There are no regulations governing the reports. c. The reports are generally delayed and historical. d. The audience tends to be stockholders, creditors and tax authorities.
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b. There are no regulations governing the reports. |
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1. A cost that is easily traceable to a cost object is known as: * a. Indirect cost b. Variable cost c. Direct cost d. Fixed cost |
c. Direct cost |
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2. A cost that is not easily or conveniently traceable to a cost object is known as: * a. Collective cost b. Indirect cost c. Additional cost d. Conversion cost |
b. Indirect cost |
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3. Which of the following terms is used to denote the response of a cost to the change in business activity? * a. Cost behavior b. Cost trend c. Cost response d. Cost accumulation |
a. Cost behavior |
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4. A cost that changes in total dollar amount with the change in the level of activity is known as: * a. Fixed cost b. Mixed cost c. Conversion cost d. Variable cost |
d. Variable cost |
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5. A cost that does not change, in total, with the change in activity is called: * a. Mixed cost b. Fixed cost c. Prime cost d. Unchanged cost |
b. Fixed cost |
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6. Mixed cost is also known as: * a. Double cost b. Semi-variable cost c. Fluctuating cost d. Full cost |
b. Semi-variable cost |
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7. According to cost formula Y=$20,000 + $4X, total cost at an activity level of 15,000 units would be: * a. $20,000 b. $60,000 c. $80,000 d. $35,000 |
c. $80,000 |
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8. Which of the following costs is not a product cost? * a. Depreciation on the plant installed in the factory b. The electricity cost of the office of factory foreman c. The cost of shipping finished products to customers d. The cost of fuel used in the factory |
c. The cost of shipping finished products to customers |
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9. Which of the following cost is not a period cost? a. Advertising cost b. Sales commission c. Interest d. Direct labor |
d. Direct labor |
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10. The cost incurred to acquire or manufacture a product is known as: * a. Period costs b. Product costs c. Admin costs d. Real costs |
b. Product costs |
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11. Prime cost = ? a. Manufacturing overhead cost + Direct labor cost b. Direct materials cost + Direct labor Cost c. Direct materials cost + Manufacturing overhead cost d. Direct Materials cost + Direct labor cost + manufacturing overhead cost |
b. Direct materials cost + Direct labor Cost |
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12. Conversion cost = ? a. Direct labor cost + manufacturing overhead cost b. Direct materials cost + manufacturing overhead cost c. Direct materials cost + admin cost d. Direct materials cost + marketing cost |
a. Direct labor cost + manufacturing overhead cost |
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13. Manufacturing cost = ? a. Direct materials cost + manufacturing cost b. Direct materials cost + direct labor cost + manufacturing overhead cost c. Direct materials cost + direct labor cost + manufacturing overhead cost + marketing and admin cost d. Prime cost + conversion cost |
b. Direct materials cost + direct labor cost + manufacturing overhead cost |
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14. The cost of alternative ‘A’ is $25,000 and the cost of alternative ‘B’ is $20,000. In managerial accounting the difference of $5,000 in costs of two alternatives would be termed as: a. Additional cost b. Extra cost c. Differential cost d. Essential cost |
c. Differential cost |
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15. The benefit forgone when one alternative is selected rather than another is known as: * a. Sunk cost b. Opportunity cost c. Differential cost d. Decision cost |
b. Opportunity cost |
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16. The Washington company incurred $50,000 to ship 22,000 liters and $42,000 to ship 18,000 liters. If the company ships 20,000 liters, its expected shipping expense would be closest to: a. $40,000 b. $44,000 c. $46,000 d. $48,000 |
c. $46,000 |
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17. Which of the following terms is correct for a cost that has already been incurred and cannot be changed by any decision? a. Past cost b. Previous cost c. Lost cost d. Sunk cost |
d. Sunk cost |
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18. Within the relevant range: a. Both variable costs and total fixed costs fluctuate b. Both total variable costs and total fixed costs will remain constant c. Variable costs per unit will remain constant and fixed costs per unit will fluctuate d. Fixed costs per unit will remain constant and variable costs per unit will fluctuate. |
c. Variable costs per unit will remain constant and fixed costs per unit will fluctuate |
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19. All costs related to the manufacturing function in a company are: a. Prime costs b. Manufacturing overhead costs c. Period costs d. Product costs |
d. Product costs |
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20. Which of the following costs would be considered production overhead in the production of bread? * a. Flour b. Yeast c. Electricity d. Sugar |
c. Electricity |
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21. Prime 21. Prime costs consist of_________.costs consist of_________. * a. Direct labor b. Direct materials + direct expenses c. Direct labor and direct expense d. Direct materials + direct labor + direct expense |
d. Direct materials + direct labor + direct expense |
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22. For a manufacturing company, which of the following is a period, but not a product cost? a. Salary of accounts executive b. Rental cost of factory building c. Salary of factory supervisor d. Depreciation on factory machineries
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a. Salary of accounts executive |
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23. Conversion costs do not include a. Direct labor b. Direct materials c. Factory utilities d. Property taxes on factory building |
b. Direct materials |
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24. A cost that remains constant in total but varies on a per-unit basis with changes in activity is called a a. Fixed cost b. Product cost c. Period cost d. Variable cost |
a. Fixed cost |
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25. The direct materials and indirect materials used in the production of a motorcycle, combined with the direct labor costs manufacturing overhead involved would be called as ____ costs. * a. Direct b. Product c. Period d. Conversion |
b. Product |
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26. Variable costs are conventionally deemed to be a. Constant per unit of output b. Outside the control of management c. Unaffected by inflation d. Constant in total when production volume changes |
a. Constant per unit of output |
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27. When classified according to traceability to cost objective, the cost of raw materials is considered a * a. Discretionary cost b. Product cost c. Direct cost d. Committed cost |
c. Direct cost |
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28. The cost associated with the next unit or the next project or incremental cost associated with an additional project as opposed to the next discrete unit. * a. Out of pocket b. Relevant c. Incremental d. Historical e. Marginal |
e. Marginal |
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29. Which of the following is a variable cost in an insurance company? * a. Office space rental b. Property taxes c. Salary of the company president d. Sales commissions |
d. Sales commissions |
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30. Which cost is also known as inventoriable cost? * a. Product cost b. Manufacturing cost c. Period cost d. Non-manufacturing cost |
a. Product cost |
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31. If direct materials = P200, direct labor = P150, and manufacturing overhead = P100, how much is the total conversion cost? a. P350 b. P250 c. P300 d. P200 |
b. P250 |
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32. We have three suppliers – A,B and C. A sells the raw materials for P100 per kilo, B sells the raw materials for P120 per kilo and C sells the raw materials for P130 per kilo. If we buy from C because he is our relative: * a. There will be a P20 out-of-pocket cost b. There will be a P30 marginal cost c. There will be a P30 opportunity cost d. There will be a P20 relevant cost |
c. There will be a P30 opportunity cost |
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33. Future costs can never be sunk cost. * a. True b. False |
a. True |
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34. It is possible for both fixed cost and variable cost to be combined in only one cost. * a. True b. False |
a. True |
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35. Bonus point? * Yes, thank you! No, mga mahihinang nilalang :D |
Yes, thank you! |
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1. A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a(n): * a. Cost Center b. Revenue Center c. Profit Center d. Investment Center |
d. Investment Center |
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2. Webster Company has sales revenue and operating expenses of $5,000,000 and $4,200,000, respectively, for the year just ended. If invested capital amounted to $6,000,000, the firm ROI was: * a. 13.33% b. 70% c. 83.33% d. 120% |
a. 13.33% |
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3. Responsibility accounting is not useful in following the principle of management by exception. * a. True b. False |
b. False |
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4. In cost centers manager have no revenue responsibilities. * a. True b. False |
a. True |
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5. In responsibility cost accounting the costs in focus are * a. Controllable costs b. Uncontrollable costs c. Both a and b d. None of the above |
a. Controllable costs |
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6. The responsibility accounting stresses on ________ * a. Decentralization b. Centralization c. Both (a) & (b) d. None of these |
a. Decentralization |
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7. In responsibility accounting system… * a. Budgets are prepared b. Actual performance is recorded c. The performance is reported d. All of the above |
d. All of the above |
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8. The responsibility accounting is also called… * a. Profitability accounting b. Activity accounting c. Both d. None of these |
c. Both |
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9. The responsibility accounting is the part of … * a. Financial accounting b. Management accounting c. Mechanized accounting d. None of these |
b. Management accounting |
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10. The responsibility accounting is a controlling tool for… * a. Top‐level management b. Lower level management c. Middle level management d. None of these |
a. Top‐level management |
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11. Which of the following system emphasizes on cost control? a. cost accounting b. responsibility accounting c. financial accounting d. none of these |
b. responsibility accounting |
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12. The responsibility centers come under the responsibility of.. * a. Cost accountants b. Management accountant c. Responsibility managers d. Auditor |
c. Responsibility managers |
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13. The subdivision of responsibility centre is… * a. Expense center b. Profit center c. Investment center d. All of the above |
d. All of the above |
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14. What is the main advantage of responsibility accounting? * a. Improves performance b. It fixes responsibility c. Helpful in decision making d. All of the above |
d. All of the above |
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15. The determination of actual value of assets employed in a responsibility center is… * a. Easy b. Can’t determine c. Difficult d. Not necessary |
c. Difficult |
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16. A cost center is: * a. An area for which costs are accumulated b. A production department where all production costs are aggregated c. The part of the business where all costs are paid to suppliers d. An area of the business accountable for both costs and revenues |
a. An area for which costs are accumulated |
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17. An investment centre is a responsibility centre where the manager has control of: * a. Costs, profits and product quality b. Costs and profits c. Costs d. Costs, profits and assets |
d. Costs, profits and assets |
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18. Responsibility accounting aims to: *a. Ensure that costs become the responsibility of a specific manager b. Ensure that a manager is punished if things go wrong c. Allocate costs to all areas of a business d. Reduce the costs that a department incurs |
a. Ensure that costs become the responsibility of a specific manager |
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19. Prime cost can be defined as: * a. The total costs of manufacturing a product b. The total direct costs of manufacturing a product c. The total costs of operating the production department where the product is made d. The cost of the first stage of the manufacture of a product |
a. The total costs of manufacturing a product |
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20. Which of the following best describes a fixed cost? * a. Represents a fixed proportion of total costs b. Has a direct relationship with output c. Increases proportionately with output d. Remains constant irrespective of the level of activity |
d. Remains constant irrespective of the level of activity |
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21. Use the following information to answer this question * a. £1,020 b. £510 c. £470 d. £120 |
c. £470 |
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22. A business has bought and sold identical items of stock during 2012 as follows: * a. £12,800 b. £8,000 c. £10,400 d. £16,000 |
a. £12,800 |
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23. The weighted average method of stock valuation would be most appropriate for: * a. A food retailer b. A motor components retailer c. A chemical manufacturer d. A building contractor |
c. A chemical manufacturer |
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24. Direct labour costs will include:A food retailer * a. Direct labour costs plus any bonuses and overtime premiums b. Total direct labour hours at the normal hourly rate of pay c. Direct labour costs plus any bonuses d. All labour costs attributable to a product |
b. Total direct labour hours at the normal hourly rate of pay |
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Involves the application and concepts to economic data so as to assist management in establishing plans for reasonable economic objectives and in the making of rational decisions with a view toward achieving these objectives. it is the process of identification, accumulation, analysis, preparation, interpretation and communication of financial information, which is used by management to plan, evaluate and control activities within an organization. it also comprises the preparation financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities. |
Management accounting |
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recognition and evaluation of business transactions and other economic events for appropriate accounting action. |
Identification |
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quantification, including estimates, of business transactions of other economic events that have occurred or forecasts of those that may occur. |
Measurement |
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disciplined and consistent approaches to recording and classifying appropriate business transactions and other economic events. |
Accumulation |
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determination of the reasons for the reported activity and its relationship with other economic events and circumstances. |
Analysis |
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meaningful coordination of accounting and/or planning data to provide information, presented logically, and including, if appropriate, the conclusions drawn from those data. |
Preparation and interpretation |
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– reporting pertinent information to management and others for internal and external uses, |
Communication |
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are concerned with providing information to managers, that is, people inside an organization who direct and control the operations. at appropriate levels are involved actively in the process of managing the entity. |
Management accountants |
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which enables both internal and external parties to evaluate organizational performance and position. Scorekeeping entails accumulating data and reporting results—to all levels of management—describing how the organization is doing. |
scorekeeping or data accumulation |
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of information that helps manager to focus on operating problem, opportunities as well as inefficiencies. |
interpreting and reporting |
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of the relative merits of possible courses of action as well as recommendation as to the best procedure. This is commonly associated with non-recurring decisions. |
problem solving or quantification |
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.The reports used to evaluate the performance of the managers and the operations they control are referred to as ___________. |
performance reports |
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Managers follow the _____________ when using performance reports. |
principle of management by exception |
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It is an integral part of the planning and control process. |
DECISION MAKING |
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________________ involves the systematic recording of business transactions, governed by a body of international financial reporting standards (IFRS) leading to the preparation of financial statements for the use of various interested parties, external as well as internal. |
Financial accounting |
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_____________ is concerned with providing financial information to persons within the organization to enable them to make informed judgements and effective decisions which further the organization’s goals. |
Management accounting |
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_________ (also called as chief accounting officer) is the financial executive primarily responsible for management accounting and financial accounting. |
Controller |
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____________ is the practice of the established science of control which is the process by which the management assures itself that the resources are procured and utilized according to plans in order to achieve the company’s objectives. |
CONTROLLERSHIP |
