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Exam 1: Managerial Accounting, the Business Organization

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Question 41

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John is a management accountant at DAP Inc.John has reason to believe that his immediate supervisor (the controller) ,the chief financial officer and the company president are engaged in accounting fraud that involves overstating assets and understating liabilities.According to the guidelines offered by the IMA,what should John do?

A) Report the suspected wrongdoings to the local police.
B) Discuss the suspected wrongdoings with his immediate supervisor.
C) Discuss the suspected wrongdoings with the company president.
D) Report the suspected wrongdoings to the audit committee or the board of directors.

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Question 42

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Variances ________.

A) are quantitative expressions of plans of action
B) ignore areas that are problem areas
C) are deviations from a plan
D) ignore areas that are presumed to be running smoothly

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Question 43

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Staff managers give advice to line managers and have authority over line managers.

The IMA's ethical standard of confidentiality does NOT require each member to ________.

Accountants support only some of the value-chain functions.

A budget is a qualitative expression of a plan of action.

The only function in the value chain where accountants are of any importance is the production function.

According to the Financial Executives Institute,a function of the treasurer is ________.

Dell Inc.buys electronic components for laptop computers from Intel using the Internet.This is an example of a(n) ________.

The Hola Company held a Christmas party.The company expected attendance of 100 people and prepared the following budget: One hundred people attended the party.The costs incurred were: What is the primary reason for the variance in total costs?

The management accountant prepares the following performance report for a company's first year of operations: Required: A)Compute variances for each line item on the income statement.Also indicate if the variances are favorable or unfavorable. B)Using the management-by-exception approach,which variances should be investigated further?

The largest U.S.association of professional accountants whose major interest is management accounting is the ________.

Feedback is usually not critical to the cycle of planning and control.

The same information may serve the attention-directing function and the problem-solving function.

Over 80 percent of companies in the United States have a code of conduct.

________ is (are) the primary consideration in choosing among accounting systems and methods.

Management accountants are exposed to only a few functional areas in an organization.

The primary users of management accounting information are ________.

The product life cycle for a refrigerator is usually a few months.

The various stages through which a product passes are called the ________.