ACC 241 Study Plan Exam 1
Chapter 1
1. Which of the following management responsibilities often involves evaluating the results of operations
against the budget?
a. Controlling
2. Which of the following is not one of Caesars Palace managers’ three primary responsibilities?
a. Accounting
3. Managerial accounting differs from financial accounting in that managerial accounting
a. Emphasizes data relevance over data objectivity
4. Most managerial accounting reports focus on the _____, providing ____ information in order to help
managers make profitable business decisions
a. Future ; relevant
5. Which of the following corporate positions is responsible for general financial accounting, managerial
accounting, and tax reporting?
a. Controller
6. Of the following skills, which are needed by today’s management accountants?
a. Cost management, decision analysis, and strategic thinking
7. Whom do the stockholders of Caesars Palace elect to oversee the corporation?
a. Board of directors
8. Managers three primary responsibilities are planning, directing & controlling
a. True
9. Management accounting is geared toward external stakeholders, such as investors and creditors
a. False
10. Management accountants often work in cross-functional teams throughout the organization
a. True
11. The internal audit function reports to the audit committee of the board of directors
a. True
12. Managerial accountants are now more often looked upon as internal business advisors, rather than
“bean counters” recording historical transactions
a. True
13. Management accountants should be technically proficient, but they don’t need strong oral and written
communication skills
a. False
14. Management accountants should be proficient in excel
a. True
15. The AICPA (American institute of certified public accountants) issues the CMA (certified management
accountant) certification
a. False
16. Identifying alternative courses of action and choosing among them
a. Decision making
17. Running the company on a day to day basis
a. Directing
18. Determining whether the company’s units are operating according to plan
a. Controlling
19. Setting goals & objectives for the company and determining strategies to achieve them
a. Planning
20. Describes historical transactions with external parties
a. Financial accounting
21. Is not required by any authoritative body such as the SEC
a. Managerial accounting
22. Reports on the company’s subunits, such as products, geographical areas, and departments
a. Managerial accounting
23. Is intended to be used by creditors & investors
a. Financial accounting
24. Is formatted in accordance with GAAP
a. Financial accounting
25. Do not disclose company information unless authorized to do so
a. Confidentiality
26. Continue to develop skills and knowledge
a. Competence
27. Don’t bias the information and reports represented to management
a. Credibility
28. If you do not have the skills to complete a task correctly, do not pretend you do
a. Competence
29. Avoid actual and apparent conflicts of interest
a. Integrity
30. Which of the following organizations is the professional association specifically for management
accountants?
a. IMA
31. Which of the following professional standards requires management accountants to continually
develop their knowledge and skills?
a. Competence
32. Which of the following professional standards requires management accountants to not disclose
private information about their organizations?
a. Confidentiality
33. Which of the following ethical standards are required of management accountants by the IMA’s
statement of ethical professional practice?
a. Integrity, confidentiality, and competence
34. The SOX Act of 2002 imposes stricter requirements over financial reporting
a. True
35. Most business decisions are now based on gut feelings, and hunches, rather than being data-driven
a. False
36. Critical thinking can be improved by asking yourself a series of questions about any issue or problem
you encounter.
a. true
37. the triple bottom line assess company performance on three factors: people, planet & profit
a. True
38. Manufacturing makes up the largest sector of the US economy
a. False
39. The globalization of business has little bearing on management accounting
a. False
40. Computer systems that integrate all of a company’s worldwide functions into one database are known
as integrated worldwide systems (IWS’s)
a. False
41. Lean thinking focuses on eliminating waste from operations
a. True
42. Seacoast motorcycles estimates it will cost $900,000 to convert an existing building to motorcycle
production. Workers will need training, at a total cost of $95,000. The additional costs to organize the
business and to establish relationships is estimated to be $160,000. The CEO believes the company can
earn profits from this expansion (before considering the costs in the preceding paragraph) of
$1,716,000.
a. Expected benefits: expected profits from increase in sales - $1,716,000
Expected costs:
Conversion of building: $900,000
Workforce training: $95,000
Organizing and establishing relationships: $160,000
Total expected costs: $1,155,000
Net expected benefit (Cost) = $561,000
43. Which of the following requires the company’s CEO & CFO to assume responsibility for the company’s
financial statements and disclosures?
a. Sarbanes-Oxley Act of 2002 (SOX)
44. Which of the following is false?
a. The triple bottom line focuses on 3 items: net income, net assets, and return on investment
b. Meaning these are true:
i. Globalization has increased the necessity for more detailed and accurate cost
information. Lean operations is a philosophy and business strategy for operating without
waste. ERP systems integrate information from all company functions into a centralized
data warehouse.
45. All of the following are business trends affecting management accounting except:
a. Sustainability, big data, and shifting economy
46. (a) one hired hand would do the work of 20 farm workers. (b) each farm worker typically works 60
hours on the lettuce thinning process each year. (c) each farm worker would earn $11 per hour plus
7.65% payroll tax. (d) the hired hand is established to cost $5500 plus $600 for delivery. (e) annual costs
of operating the hired hand are expected to be $1400
a. Cost Benefit Analysis
Expected benefits (cost savings):
Payroll taxes: $1010
Wages: $13,200
Total expected benefits: $14,210
Expected Costs:
Annual operating costs: $1400
Delivery cost: $600
Machine cost: $5500
Total expected costs: $7500
Net expected benefit (cost): $6,710
47. Classic industries manufacturers iPhone case covers. Allison Castro, the CEO, is trying to decide whether
to adopt a lean thinking model. She expects that adopting lean production would save $95,000 in
warehousing expenses and $49,000 in spoilage costs. Adopting lean production will require several
one-time up-front expenditures: $28,500 for an employee training program, $35,000 to streamline the
plant’s production process, and $7,750 to identify suppliers that will guarantee zero defects and on-
time delivery.
(a) what are the total costs of adopting lean production?
®employee training program + streamlining plants production process + suppliers that will
guarantee zero defects.
a. $71,250
(b) what are the total benefits of adopting lean production?
®Savings in warehouse expenses + savings in spoilage costs
