Comm 305 - Chapter 1, questions and answers with complete top solutions

Comm 305 - Chapter 1, questions and answers with complete top solutions Given the decision to employ straight-line amortization or a usage-based amortization method, the management accountant's need to report the most relevant economic information to external users will determine which method is used. FAlse Management accounting and financial accounting, while in the same field, are mutually exclusive disciplines. False Decision making is an integral part of the planning, directing, and motivating functions, but not of the controlling function F Reports scrutinized by managerial accountants are: a. special purpose for specific decisions. b. are highly aggregated. c. do not include those focused on business subunits. d. do not include non-financial data relevant to business decision making. a Which of the following is false in terms of the reason companies replace a CEO with a management committee? To avoid disruptions associated with replacing a CEO To improve collaboration To reduce management continuity To enhance decision-making c n establishing a good internal reporting system, a company should: a. ensure that these reports agree to generally accepted accounting principles. b. have the Board of Directors agree to the information provided. c. establish clearly understood standards of performance. d. all of the above are valid reasons. c Which one of the following involves coordinating a company's activities to produce a smooth-running operation? auditing directing controlling planning b Which function is achieved when a manager is determining whether planned goals are being met? motivating controlling directing planning b Corporate social responsibility only considers: sustainable business practices with regards to the environment. profitability. sustainable business practices with regards to employees. d. the triple bottom line including performance with regard to people, plant and profit. d Choose the incorrect answer. Manufacturing companies need to establish effective and realistic production goals for their processes. As a result of the Sarbanes-Oxley Act, companies now pay more attention to the composition of the board of directors. Proper incentives need to be implemented to foster an ethical business environment. d. While generally not encouraged, lapses in ethical behaviour are irrelevant to a company's operating income. d Which of the following is true? a. Dissatisfied employees cite a decline in ethical behaviour is a result of a change in corporate culture. Unethical corporate behaviour occurs only in the United States because of its capitalistic environment. Unethical behaviour rarely causes a decline in investor confidence. Unethical actions are reasonable in an environment wherein unreasonable budgets and targets have been set. a In Canada, which of the following professional accounting organizations play an important role in promoting high standards of ethics in the accounting profession? a. Chartered Professional Accountants of Canada (CPA Canada) The Financial Planning Standards Council (FPSC) The Canadian Institute of Financial Planning (CIFP) all of the above a A company acting ethically must adapt its external reports to any changes required as it is appropriate for its business cycle. if they are considered pertinent to its business activities. c. as stipulated by the CPA Canada handbook and GAAP. instantly. c A recent survey of fraud by international accounting firm KPMG reported reported a 13% decrease in instances of corporate fraud compared with five years earlier. financial reporting fraud (the intentional misstatement of financial reports) was the least costly to companies. that employee fraud (such things as expense account abuse, payroll fraud, and theft of assets) represents 60% of all instances of fraud. business scandals with large investment losses and few employee layoffs. ... Data visualizations is the use of techniques to analyze data to make informed decisions. refer to the use of software to analyze data. c. help managers in acquiring an understanding of business trends. do not help managers in acquiring an understanding of the relationships between variables. c For what reason is a product cost primarily tracked? a. to effectively allocate the cost of products to measure profitability to keep management's bonuses increasing every year to keep up with current cost trends to bring products to market to determine what amounts are necessary for allocating overhead a The theory of constraints is a theory that the benefit of making a change in a production process should be weighed against the cost of making that change. that even the best suggestions for improvement are likely to be rejected due to opposition from those who have to implement the changes. c. a specific approach used to identify and manage constraints in order to achieve the company's goals. not applicable to service operations. ... A balanced scorecard is focuses on non-financial measures in order to balance the many other financial reports companies use to evaluate their operations. b. a performance-measurement approach that uses both financial and non-financial measures to evaluate a company's operations in an integrated way. a tool used to measure the benefits and costs of implementing a new strategy. used only by small organizations that cannot afford more expensive methods of evaluating their operations. b 1. Financial accounting focuses on providing information to internal users 2.Managerial accounting analyzes how changes in the number of units produced impact production costs and profitability. 3.Preparation of budgets is part of financial accounting False True False 4.Managerial accounting applies only to merchandising and manufacturing companies 5.Both managerial accounting and financial accounting deal with many of the same economic events 6.Managerial accounting reports are prepared only quarterly and annually False True False 7.Financial accounting reports are general-purpose reports 8.Managerial accounting reports pertain to subunits of the business 9.Managerial accounting reports must comply with generally accepted accounting principles 10.Although managerial accountants are expected to behave ethically, there is no code of ethical standards for managerial accountants. True True False False