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Management Accounting Information for Creating and Managing Value Kim Langfield Smith 8th Edition - Test Bank
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Chapter 01 Test Bank – Static KEY 1. What type of accounting system is part of an organisation's management information system for internal use only? A. Financial accounting B. Management accounting C.Governmental accounting D. All of the given answers AACSB: Reflective Difficulty: Easy Learn...

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  • September 16, 2023
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  • 2022/2023
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, Chapter 01 Test Bank – Static KEY

1. What type of accounting system is part of an organisation's management information system for internal use only?

A. Financial accounting
B. Management accounting
C. Governmental accounting
D. All of the given answers

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.03 Describe the major differences between management accounting and financial accounting information
Topic: Role of Management Accountant in Value Creation

2. Which of the following statement/s about management accounting is/are true?

i. It is a part of an organisation's management information system.

ii. It is relied on by managers to plan and control an organisation's operations.

iii. It is relied on by external users to make investment decisions.

A. i and ii
B. i, ii and iii
C. iii
D. ii

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.02 Define management accounting in terms of value creation
Topic: Role of Management Accountant in Value Creation

3. Which of the following statement/s about management accounting is/are true?

i. It is concerned only with information obtained from the accounting records.

ii. It is concerned with financial and non-financial information.

iii. It can provide information useful for making decisions.

A. i
B. i and ii
C. ii and iii
D. ii

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.02 Define management accounting in terms of value creation
Topic: Role of Management Accountant in Value Creation

4. A strategy is

i. another name for a long-term objective

ii. the same as an objective

iii. a means by which an organisation plans to meet its mission and achieve its objectives

A. i
B. ii
C. iii
D. i and ii

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.06 Explain the basic concepts of strategy and how management accounting systems can support strategies
Topic: Fundamental Management Processes


5. Which of the following is not an objective of management accounting?

A. Providing information for making decisions
B. Providing information for planning
C. Providing information for control
D. Providing information for profit and loss statements

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.06 Explain the basic concepts of strategy and how management accounting systems can support strategies
Topic: Objectives of Management Accounting




6. Planning is
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-
Hill Education.

,A. comparing actual performance against targets
B. setting objectives and formulating plans for future operations
C. measuring the performance of managers against preset targets
D. motivating managers towards achieving organisational goals

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.07 Explain how planning and control mechanisms can be used to support resource management
Topic: Fundamental Management Processes

7. 'Control' involves

A. formulating details of operations and finances for the next financial year
B. comparing actual performance against targets
C. deciding whether to expand activities
D. All of the given answers

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.07 Explain how planning and control mechanisms can be used to support resource management
Topic: Fundamental Management Processes

8. Part of the planning process involves

A. formulating details of operations and finances for the next financial year
B. comparing actual performance against targets
C. making a choice between available alternatives
D. measuring the performance of managers against preset targets

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.07 Explain how planning and control mechanisms can be used to support resource management
Topic: Fundamental Management Processes

9. The role of management accounting is to

A. provide information to parties outside the organisation
B. provide information to managers within the organisation.
C. provide information to government agencies.
D. All of the given answers

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.02 Define management accounting in terms of value creation
Topic: Objectives of Management Accounting

10. Budgeting can be used in an organisation to

A. motivate managers to achieve organisational goals.
B. control operations.
C. provide managers with information for making decisions and planning.
D. All of the given answers

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.07 Explain how planning and control mechanisms can be used to support resource management
Topic: Fundamental Management Processes


11. The benefits of management accounting information include

A. improved decisions.
B. more effective planning.
C. greater efficiency of operations.
D. All of the given answers

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.09 Describe the factors that may influence the design of management accounting systems including behavioural issues, cost-benefit trade-offs and the implications of
contingency and institutional theories
Topic: Fundamental Management Processes




12. Management accounting

1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-
Hill Education.

, A. must comply with Australian accounting standards.
B. focuses primarily on the needs of managers internal to the organisation.
C. provides information for parties external to the organisation.
D. involves reports focusing on the enterprise in its entirety.

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.02 Define management accounting in terms of value creation
Topic: Difference between Management and Financial
Accounting

13. Which of the following is necessary for management accounting information to be useful?

A. It must report to external users.
B. It must develop a framework of principles and guidelines.
C. It must adapt to accommodate changes in the business environment.
D. It must focus on the enterprise in its entirety.

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.10 Identify the organisational responses and management accounting responses to changes in the business environment
Topic: Difference between Management and Financial Accounting

14. Both financial and management accounting

A. draw on data from the organisation's basic information system.
B. provide information for external users.
C. must comply with Australian accounting standards.
D. rely exclusively on historical data.

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.02 Define management accounting in terms of value creation
Topic: Difference between Management and Financial
Accounting

15. Which of the following statements regarding management accounting information is false?

A. The cost of providing the information must be considered in the light of the benefits received from the information.
B. All information derived is necessary despite the cost.
C. The information entails both costs and benefits.
D. The cost of the information includes the time spent by the user to read, understand and use the information.

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.09 Describe the factors that may influence the design of management accounting systems including behavioural issues, cost-benefit trade-offs and the implications of
contingency and institutional theories
Topic: Fundamental Management Processes

16. A management accountant should be concerned with

A. providing daily information on physical measures of operational performance.
B. assisting in interdepartmental communications.
C. developing and implementing information systems.
D. All of the given answers

AACSB: Reflective
Difficulty: Medium
Learning Objective: 1.04 Explain where management accountants are located in organisations
Topic: Role of Management Accountant in Value Creation


17. The largest professional organisation for management accountants in Australia is the

A. CPA Australia.
B. Australian Accounting Association.
C. Institute of Chartered Accountants in Australia.
D. Certified Institute of Management Accountants.

AACSB: Reflective
Difficulty: Easy
Learning Objective: 1.12 After studying the appendix, discuss the professional qualifications that are relevant to becoming an accountant, and the ethical standards to which accountants must adhere
Topic: Role of Management Accountant in Value Creation




1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-
Hill Education.

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