CHAPTER1:I

NTRODUCTI
ON

Mul
ti
pleChoi
ce

a1.Thecont r
ollerofacompanyorotheror
gani
zat
ioni
s
a.astaffmanager .
b.anoperatingmanager.
c.anaccount ant,
notamanager.
d.anaturalmanager .

c2.Whichitem isNOTanI
MASt
andar
dforEt
hical
Conduct
?
a.Int
egri
ty.
b.Compet ence.
c.Loyalt
y.
d.Objecti
vit
y.

d3.Whichstat
ementaboutthedegreeofdetai
linareportistr
ue?
a.I
tdependsonthel
ev el
oft hemanagerr
eceivi
ngther epor
t.
b.I
tmaydependont hefrequencyoft
hereport.
c.I
tdependsonthetypeofmanagerrecei
v i
ngthereport.
d.Al
loftheabov
e.

b4.Manageri
al account
ingi
ssimi l
artofi
nancial
accounti
ngint
hat
a.bot
haregov ernedbygenerall
yacceptedaccount
ingpri
nci
ples.
b.bot
hdeal witheconomicevents.
c.bot
hconcent rat
eonhistor
icalcost
s.
d.bot
hclassifyrepor
tedi
nformationi
nt hesameway .

d5.Manageri
alaccount
ingdif
fer
sfrom f
inanci
alaccount
ingi
nthati
tis
a.moreconcernedwit
hthefutur
e.
b.moreconcernedwit
hsegmentsofacompany .
c.l
essconstr
ainedbyrul
esandregul
ations.
d.al
loft
heabov e.

b6.Oneoft heway smanager i

alaccountingdif
fer
sfrom fi
nanci
alaccount
ingi
sthatmanager
ial
accounti
ng
a.i
sboundbygener allyacceptedaccountingpri
ncipl
es.
b.cl
assifi
esinformationindifferentways.
c.doesnotusef inancialst
atement s.
d.dealsonlywitheconomi cev ents.

d7.Whichact i
vit
yisNOTnor mal l
yperformedbymanagerialaccountants?
a.Assist
ingmanager stoi
nterpretdatainmanageri
alaccounti
ngr eport
s.
b.Designingsystemstoprovideinformati
onfori
nter
nalandext er
nalrepor
ts.
c.Gatheri
ngdat afr
om sourcesotherthantheaccounti
ngsy st
em.
d.Decidi
ngt hebestlev
elofinventorytobemaintai
ned.

1
c8.Conventionalandjust-
in-
ti
memanuf actur
ersboth
a.Maintainlar
geinventori
esofthei
rproducts.
b.Sel
lonlytoot hermanufacturi
ngcompanies.
c.Desir
et omeetcust omers'deadl
i
nes.
d.Requireaboutthesameamountofspacet ooper
ate.

d9.Classi
fyi
ngcostsbybehavi
oris
a.associ
atedpri
maril
ywithf
inanci
alaccounti
ng.
b.notrel
evantt
oacompanyt hathasonlysell
ingexpenses.
c.commoni nrepor
tsprepar
edforexter
nalreader
s.
d.noneoftheabove.

a10.Whi
chisNOTacommonaccount i
ngclassi
fi
cati
onofcost
s?
a.Bythemet hodofpaymentfortheexpendit
ure.
b.Bytheobjecti
veofexpendit
ure.
c.Bybehavior.
d.Bythefuncti
onincur
ri
ngt heexpendi
ture.

a11.Whichclassi
fi
cat
ionofcost
sismostr
elev
antf
ori
ncomest
atement
stobeusedi
nter
nal
l
y?
a.Behavi
or.
b.Functi
on.
c.Methodofpay ment.
d.Object
.

d12.Thesetofpr ocessest hattr

ansf
ormr
awmat
eri
alsi
ntof
ini
shedpr
oduct
sisknownasa
a.different
iati
onstr at
egy .
b.flexiblemanufact ur
ingsy st
em.
c.lowestcostst rategy.
d.valuechai n.

a13.I
ncomest at
ementscl
assif
yingcostsbyobjectshowsuchitemsas
a.taxexpense,wagesexpense,depreci
ati
onexpense.
b.costofgoodssold,sel
li
ngexpenses,administ
rati
veexpenses.
c.assets,l
iabi
li
ti
es,
owners'equi
ty.
d.alloftheabove.

a14.Theper i
odt hatbegi
nswit
ht hearri
valofmat
eri
alsandendswi
tht
heshi
pmentofacompl
etedgood
isthe
a.cycleti
me.
b.manuf acturi
ngcell.
c.comput er-
integr
atedmanufactur
ing.
d.performanceper i
od.

a15.Whichf unct
ioni
smostdi
rect
lyr
elat
edt
omanagementbyobj
ect
ives?
a.Pl
anni ng.
b.Control.
c.Decisi
onmaki ng.
d.Reporting.

d16.Whichconsiderati
oninf
luencest hefr
equencyofanint
ernal
repor
t?
a.Thewi shesofthemanager sreceivi
ngtherepor
t.
b.Thefrequencywi t
hwhichdeci si
onsaremadet hatr
equir
etheinf
ormat
ioni
nther
epor
t.
c.Thecostofpr epari
ngtherepor t
.
d.All
oftheabov e.

2
a17.Ajust-i
n-timemanuf actur
erismor el
i
kel
ythanaconv
ent
ional
manuf
act
urert
o
a.receiv
emor efrequentdeli
veri
esofmater
ial
s.
b.spendl essmoneyonadv erti
sing.
c.needwor ker
swi thfewerskil
l
s.
d.alloftheabov e.

c18.Aconv enti
onalmanufactur
eri smorel
ikel
ythanaj
ust
-i
n-t
imemanuf
act
urert
o
a.haveashor tproducti
oncycle.
b.producegoodsi nsmal l
batches.
c.holdlargeinv
entori
estoserv easbuff
ers.
d.noneoft heabov e.

a19.Thepr
ofessi
onal
cer
ti
fi
cat
ionmostr
elev
antf
ormanager
ial
account
ant
sist
he
a.CMA.
b.CPA.
c.CSA.
d.MAS.

d20.Afir
mt hatiscompet
ingusi
nga___
__ _
____
___
______
____str
ategyi
sat
tempt
ingt
ocr
eat
ea
percept i
onofuni
quenesst
hatwi
llpermi
tahighersel
li
ngpr i
ce.
a.val
uechai n
b.l
owestcost
c.l
eadt ime
d.dif
ferentiat
ion

b21.Planningandcont rolare
a.diff
erentnamesf orthesamet hi
ng.
b.thebasi cfunct
ionsofmanagement .
c.describedequallywel l
bytheterms"decisionmaki
ng"and"
perf
ormanceev
aluat
ion.
"
d.exempl i
fiedby,respecti
vel
y,f
inanci
alstatement
sandbudgeti
ng.

a22.I
ncontrasttoabalancesheet,ani
ncomest at
ement
a.i
sforaper i
odoftime,abalancesheetisatapointi
ntime.
b.gi
vesinformati
onaboutcashandabal ancesheetdoesnot.
c.i
spreparedaftert
hestatementofretai
nedearni
ngs.
d.hastwocol umns,whil
eabalancesheethasmor ethantwo.

c23.Onecharacter
isti
coft heconvent
ional
manuf
act
uri
ngenv
ironmenti
s
a.fl
exibl
emanuf acturi
ngsystems.
b.manufacturi
ngcel l
s.
c.ajust-
in-
casephilosophy.
d.ahighdegreeofqual i
tycontr
ol.

d24.Acharact
eristi
coft hej
ust-i
n-t
imemanufact
uri
ngenv
ironmenti
s
a.fr
equentdeliv
eriesofmaterial
s.
b.manufactur
ingcells.
c.l
it
tleornoinventoryoffi
nishedproduct
.
d.al
loftheabov e.

3
d25.Conventi
onalandj ust-
in-
ti
memanuf actur
ersdif
ferinthatt
heconv
ent
ional
manuf
act
ureri
sli
kel
yto
a.beanewent rantintoitsindust
ry.
b.needlessstoragespacet hanitsJI
Tcompet i
tors.
c.gi
velesscredibil
it
yt omanagementaccount i
ngr eport
s.
d.havealongerpr oducti
oncy cl
ethanit
sJITcompet i
tor
s.

Tr
ue-
Fal
se

F1.Publ
i
shedf
inanci
alst
atement
sshowcost
scl
assi
fi
edbybehav
ior
.

T2.Gener
all
yaccept
edaccount
ingpr
inci
plesgov
ernf
inanci
alaccount
ingbutnotmanager
ial
account
ing.

T3.Economi
cev
ent
sar
ether
awdat
aforbot
hfi
nanci
alandmanager
ial
account
ing.

F4.I
nter
nal
financi
alst
atement
smustbepr
epar
edusi
nggener
all
yaccept
edaccount
ingpr
inci
ples.

T5.Thef
orm andcont
entofr
epor
tscani
nfl
uencedeci
sionsmadebymanager
s.

F6.Management
-by
-obj
ect
ivesandmanagement
-by
-except
ionar
etwonamesf
ort
hesamegener
al
managementpri
nci
ple.

F7."
Prof
orma"i
sthenamegi
vent
oani
ncomest
atementt
hatcl
assi
fi
escost
sbyf
unct
ion.

T8.Somemanager
ial
account
ingr
epor
tscont
aincost
snoti
ncor
por
atedi
nthebasi
caccount
ingsy
stem.

F9.Apr
ofessi
onalexaminati
onexi
stst
otestt
hecompet
enceoff
inanci
alaccount
ant
s,butnotof
manageri
alaccountant
s.

F10.Manager
ial
account
ant
sshoul
d,buthav
enoobl
i
gat
iont
o,mai
ntai
nthei
rpr
ofessi
onal
ski
l
ls.

Pr
obl
ems

1.Basedont
hef
oll
owi
ng,
comput
etot
alowner
s'equi
ty.

Cash $8,000Tot
alnoncur
rentl
i
abi
li
ti
es$ 0
Total
asset
s $64, 000Retai
nedearni
ngs $16,
000
Total
contr
ibut
ed
capi
tal $12, 000Curr
entli
abi
li
ti
es $36,
000

SOLUTI
ON:

$28,
000 (
$16,
000RE+$12,
000cont
ri
but
edcapi
tal
)

4
2.Basedont
hef
oll
owi
ng,
comput
etot
alnoncur
rentasset
s.

Tot
alcurr
entasset s $600,000
Tot
alcurr
entliabi
li
ti
es $240,000
Ret
ainedearnings $162,000
Tot
alnoncurrentl
iabil
i
ties $710,000
Tot
alcontr
ibutedcapital $360,000

SOLUTI
ON:

$872,
000 (
$240,
000+$710,
000+$360,
000+$162,
000-$600,
000)

3.Basedont
hei
nfor
mat
ionpr
ovi
ded,
comput
eaccr
uedwagespay
abl
eatt
heendof20X4.

Accr
uedwagespayabl
e,begi
nni
ngof20X4 $14,
000
Wagesexpensef
or20X4 $45,
000
Cashpai
din20X4forwages $42,500

SOLUTI
ON:

16,
500 (
$14,
000+$45,
000-$42,
500)

4.Usi
ngt
hef
oll
owi
ngdat
a,f
indt
hemi
ssi
ngi
tems.

Totalasset
s,begi nningofy ear.......$160
Totalasset
s,endofy ear..........$240
Totall
iabi
li
ti
es, beginningofy ear....$120
Totalowners'equi t
y,endofy ear......$60
Netincomef ory ear............$24
Additi
onali
nv estmentdur ingy ear......$16
Contri
butedcapi tal
,beginningoft heyear.$30

a.Tot
alowner
s'equi
tyatt
hebegi
nni
ngoft
hey
ear
.

b.Tot
all
i
abi
l
iti
esatt
heendoft
hey
ear
.

c.Ret
ainedear
ningsatt
hebegi
nni
ngoft
hey
ear
.

d.End-
of-
the-
yearr
etai
nedear
nings.

e.Di
vi
dendsdecl
areddur
ingt
hey
ear
.

SOLUTI
ON:

a.Tot
alOE,$40(
$160-$120)

b.Tot
all
i
abi
l
iti
es,$180(
$240-$60)

c.Begi
nni
ngRE,
$10(
$40begi
nni
ngowner
s'equi
ty-$30)

d.Endi
ngRE,$14[
$60-(
$30+$16)
]

5
e.Di
vi
dendsdecl
ared,
$20(
$10ofbegRE+$24-$14endi
ngRE)

5.Basedont
hef
oll
owi
ng,
comput
etot
alowner
s'equi
ty.

Cash $30,
000Tot al
noncurr
entli
abili
ti
es$18,
000
Total
asset
s $126, 000Retainedear
nings $24,
000
Curr
entli
abil
i
ties $56,000

SOLUTI
ON:

$52,
000 (
126,
000Tot
alasset
s-$56,
000cur
rentl
i
abi
l
iti
es-$18,
000t
otal
noncur
rentl
i
abi
l
iti
es)

6.Basedont
hef
oll
owi
ng,
comput
etot
alnoncur
rentasset
s.

Tot
alcurr
entasset s $135,000
Tot
alcurr
entliabi
li
ti
es $70,
000
Ret
ainedearnings $47,500
Tot
alnoncurrentl
iabil
i
ties $182,500
Tot
alowners'equity $125,000

SOLUTI
ON:

$242,
500 (
$70,
000+$182,
500+$125,
000-$135,
000)

7.Basedont
hei
nfor
mat
ionpr
ovi
ded,
comput
eaccr
uedt
axespay
abl
eatt
heendof20X3.

Accruedtaxes,
begi
nningof20X3 $244,
000
Taxesexpensefor20X3 $760,
000
Cashpaidin20X3fortaxes $750,000

SOLUTI
ON:

$254,
000 (
$244,
000+$760,
000-$750,
000)

8.Basedont
hei
nfor
mat
ionpr
ovi
ded,
comput
epr
epai
dsuppl
i
esatt
heendof20X5.

Prepai
dsuppli
es,begi
nningof20X5 $10, 000
Suppli
esexpensefor20X5 $210,000
Cashpaidin20X5forsuppli
es $216,000

SOLUTI
ON:

$16,
000 (
$10,
000+$216,
000-$210,
000)

6
9.Usi
ngt
hef
oll
owi
ngdat
a,f
indt
hemi
ssi
ngi
tems.

Totalasset
s,beginningofy ear.......$1,050
Totalasset
s,endofy ear..........$1,200
Totall
iabi
li
ti
es,beginningofy ear....$630
Totalowners'equit
y,endofy ear......$480
Netincomef oryear............$164
Additi
onalcapit
al i
nvestedduringy ear...$ 50
Contri
butedcapital
,beginningoft heyear.$200

a.Tot
alowner
s'equi
tyatt
hebegi
nni
ngoft
hey
ear
.

b.Tot
all
i
abi
l
iti
esatt
heendoft
hey
ear
.

c.Ret
ainedear
ningsatt
hebegi
nni
ngoft
hey
ear
.

d.End-
of-
the-
yearr
etai
nedear
nings.

e.Di
vi
dendsdecl
areddur
ingt
hey
ear
.

SOLUTI
ON:

a.Tot
alOE,$420(
$1,
050-$630)

b.Tot
all
i
abi
l
iti
es,$720(
$1,
200-$480)

c.Begi
nni
ngRE,
$220(
$420begi
nni
ngowner
s'equi
ty-$200)

d.Endi
ngRE,$230[
$480-(
$200+$50)
]

e.Di
vi
dendsdecl
ared,
$154(
$220ofbegRE+$164-$230endi
ngRE)

10.Usi
ngt
hef
oll
owi
ngdat
a,f
indt
hemi
ssi
ngi
tems.

Totall
iabi
li
ti
es,beginningofy ear.....$440
Totall
iabi
li
ti
es,endofy ear........$490
Totalowners'equit
y,begi nningofy ear....$340
Totalasset
s,endofy ear...........$950
Div
idendsdeclareddur i
ngt hey ear.......$74
Addit
ionalcapit
al i
nvesteddur ingyear....$90
Contr
ibutedcapital
,begi nningofthey ear..$240

a.Tot
alasset
satt
hebegi
nni
ngoft
hey
ear
.

b.Tot
alowner
s'equi
tyatt
heendoft
hey
ear
.

c.Ret
ainedear
ningsatt
hebegi
nni
ngoft
hey
ear
.

d.End-
of-
the-
yearr
etai
nedear
nings.

e.Neti
ncomef
ory
ear
.

SOLUTI
ON:

7
a.Tot
alasset
s,$780(
$440+$340)

b.Tot
alowner
s'equi
ty,$460(
$950-$490)

c.Begi
nni
ngRE,
$100(
$340begi
nni
ngowner
s'equi
ty-$240)

d.Endi
ngRE,$130[
$460-(
$240+$90)
]

e.Neti
ncome,
$104(
$130ofendi
ngRE+$74-$100begi
nni
ngRE)