1. Management accounting information focuses on external reporting.f f f f f f
Answer: False Difficulty: 1 Objective: 1
Terms to Learn: f management accounting
Management accounting information focuses on internal reporting.f f f f f f
2. A good cost accounting system is narrowly focused on a continuous reduction of
f f f f f f f f f f f f
costs.
f
Answer: False Difficulty: 2 Objective: 1
Terms to Learn: f cost accounting
f f
A good cost accounting system is broadly focused to provide information that helps
f f f f f f f f f f f f
managers at all levels implement, monitor, and evaluate company strategies.
f f f f f f f f f f
3. Modern cost accounting plays a significant role in management decision making.
f f f f f f f f f f
Answer: True Difficulty: 1 Objective: 1
Terms to Learn: f f cost accounting f
4. The balance sheet, income statement, and statement of cash flows are used for
f f f f f f f f f f f f
financial accounting, but not for management accounting.
f f f f f f f
Answer: False Difficulty: 1 Objective: 1
Terms to Learn: f financial accounting
f f
The balance sheet, income statement, and statement of cash flows are used for
f f f f f f f f f f f f
financial accounting and also for management accounting.
f f f f f f f
5. Financial accounting is broader in scope than management accounting.
f f f f f f f f
Answer: False Difficulty: 2
f f Objective: 1 f f f
Terms to Learn:
f f financial accounting, management accounting
f f f f
Management accounting is broader in scope than financial accounting.
f f f f f f f f f
6. Cost accounting measures and reports short-term, long-term, financial, and
f f f f f f f f
nonfinancial information.
f f
Answer: True f f Difficulty: 2 f f Objective: f f 1
Terms to Learn: f f cost accounting f
7. Cost management provides information that helps increase value for customers.
f f f f f f f f f
1-1
, Answer: True Difficulty: 1 Objective: 1
Terms to Learn: f f cost management f
8. An ideal database should consist of data that could be used for a single purpose
f f f f f f f f f f f f f f
only.
f
Answer: False Difficulty: 2 Objective: 1
Terms to Learn: f f management accounting f
An ideal database should be able to be used for multiple purposes.
f f f f f f f f f f f
9. An Enterprise Resource Planning (ERP) System is a single database that collects
f f f f f f f f f f f
data and feeds into applications that support each of the company’s business
f f f f f f f f f f f f
activities, such as purchases, production, distribution, and sales.
f f f f f f f f
Answer: True Difficulty: 1 Objective: 1
Terms to Learn: f management accounting
10. Cost accounting provides information only for management accounting purposes.
f f f f f f f f
Answer: False Difficulty: 1 Objective: 1
Terms to Learn: f f cost accounting f
Cost accounting provides information for financial accounting as well as for
f f f f f f f f f f
management accounting purposes.
f f f
11. Cost management involves long-term and short-term decisions that attempt to
f f f f f f f f f
increase value for customers and lower costs of products or services.
f f f f f f f f f f f
Answer: True Difficulty: 1 Objective: 1
Terms to Learn: f f cost management f
12. All strategies should be evaluated regarding the resources and capabilities of the
f f f f f f f f f f f
company.
f
Answer: True Difficulty: 1 Objective: 2
Terms to Learn: f strategy
13. The best-designed strategies are valuable whether or not they are effectively
f f f f f f f f f f
implemented.
f
Answer: False Difficulty: 1 Objective: 2
Terms to Learn: f strategy
Implementation is essential or the strategy is useless.
f f f f f f f
1-2
,14. The key to a company’s success is creating value for customers while
f f f f f f f f f f f
differentiating itself from its competitors.
f f f f f
Answer: True Difficulty: 1 Objective: 2
Terms to Learn: f strategy
15. The key to a company’s success is always to be the low cost producer in a particular
f f f f f f f f f f f f f f f f
industry.
f
Answer: False Difficulty: 2 Objective: 2
Terms to Learn: f strategy
The low cost producer in a particular industry will not necessarily be successful.
f f f f f f f f f f f f
16. Companies generally follow one of two basic strategies: 1) providing a quality
f f f f f f f f f f f
product or service at low prices, or 2) offering a unique product or service often
f f f f f f f f f f f f f f f
priced higher than competing products.
f f f f f
Answer: True Difficulty: 2 Objective: 2
Terms to Learn: f strategy
17. Management accountants should have little or no role in deciding on a company’s
f f f f f f f f f f f f
strategy.
f
Answer: False Difficulty: 1 Objective: 2
Terms to Learn: f strategy
Management accountants should play a significant role in deciding on a company’s
f f f f f f f f f f f
strategy.
f
18. Companies can decide on an appropriate strategy based strictly on internally
f f f f f f f f f f
available information.
f f
Answer: False Difficulty: 1 Objective: 2
Terms to Learn: f strategy
Companies must obtain external information as well as internal information to decide
f f f f f f f f f f f
on an appropriate strategy.
f f f f
19. Strategic cost management describes cost management that specifically focuses on
f f f f f f f f f
strategic issues.
f f
Answer: True Difficulty: 1 Objective: 2
Terms to Learn: f f strategic cost management f f
1-3
, 20. The supply chain refers to the sequence of business functions in which customer
f f f f f f f f f f f f
usefulness is added to products or services.
f f f f f f f
Answer: False Difficulty: 1 Objective: 3
Terms to Learn: f supply chain f
The value chain refers to the sequence of business functions in which customer
f f f f f f f f f f f f
usefulness is added to products or services.
f f f f f f f
21. An effective way to cut costs is to eliminate activities that do not improve the
f f f f f f f f f f f f f f
product attributes that customers value.
f f f f f
Answer: True Difficulty: 1 Objective: 3
Terms to Learn: f f cost management f
22. For optimal planning success it is best if each business function within the value
f f f f f f f f f f f f f
chain is performed one at a time in sequence.
f f f f f f f f f
Answer: False Difficulty: 1 Objective: 3
Terms to Learn: f value chain
f f
Optimally, success is achieved when two or more of the individual business functions
f f f f f f f f f f f f
work concurrently as a team.
f f f f f
23. For best results, cost management emphasizes independently coordinating supply
f f f f f f f f
chain activities within your company and not interfering with other companies.
f f f f f f f f f f f
Answer: False Difficulty: 2 Objective: 3
Terms to Learn: f cost management
f f
Cost management emphasizes integrating and coordinating supply chain activities
f f f f f f f f
across all companies within the supply chain.
f f f f f f f
24. Technological innovation has led to shorter product-life cycles and a need to bring
f f f f f f f f f f f f
new products to market more rapidly.
f f f f f f
Answer: True Difficulty: 1 Objective: 3
Terms to Learn: f f design of products, services, or processes
f f f f f
25. Key success factors include cost, quality, timeliness, and innovation.
f f f f f f f f
Answer: True Difficulty: 1 Objective: 3
Terms to Learn: f value chain f
1-4
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