FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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TRUE OR FALSE
Please answer all.
Transcribed Image Text:Chapter 1 Stratogic Cost Managomont ond Monagoment Accounting
21
I. TRUE OR FALSE STATEMENTS. Write "True" if the statement is true and write "False" if the
statement is false:
1. Reports prepared in management accounting are general-purpose reports, whereas
reports prepared in financial accounting are usually special-purpose reports.
2. Management accounting information generally pertains to an entity as a whole and is
very detailed.
3. Management accounting applies only to manufacturing companies.
4. Determining the unit cost of manufacturing a product is an output of management
accounting.
5. Management accounting internal reports are prepared less frequently than classified
financial statements.
6. The management function of planning is mainly concerned with setting goals and
objectives for the entity.
7. An organization chart in a manufacturing company replaces the chart of accounts.
8. Directing is the process of determining whether planned goals are being met.
9. Decision-making is an integral part of the planning, directing and motivating functions,
but not of the controlling function.
10. The theory of constraints is used to measure performance.
11. The focus of a TQM system is to reduce defects in finished products.
12. Recognize and communicate professional limitations or other constraints that would
preclude responsible judgment or successful performance of an activity is an integrity
ethical conduct of professionals.
13. Management accountants must refrain form disclosing confidential information
acquired in the course of their work, except when authorized, unless legally obligated to
do so.
14. Competence is one of the underlying ethical conduct professionals must maintain.
15. The plans of management are expressed in quantitative form as budgets.
16. In practice, the planning, organizing, and controlling functions of management are kept
separate from the decision-making function.
17. Staff departments in an organization generally have direct authority over line
departments.
18. The accounting information produced by a management accounting system does not
include the expenses incurred in an operating department.
19. Future-oriented reports are not a basic feature of a financial accounting system.
20. Management accounting deals with providing economic information to internal
constituencies.
21. The functions of management accounting information are: operational control, product
and customer costing, management control, and external reporting.
22. The steps to be followed in implementing an organization's objectives are set down
through strategic planning.
23. Strategic planning is sometimes referred to as setting policy.
24. "Controlling" refers primarily to setting maximum limits on spending in an
organization.
25. Management accountant must understand and anticipate the reactions of individual to
information and measurements.
26. A balanced report is a measurement system for clarifying, communicating and
implementing business strategy.
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Transcribed Image Text:Chacter tStroteak Cost Meneaement.and Menment Accoutog
27. Management accounting produces information that helps workers, manager, and
executives in organizations make better decisions and improve their processes and
performance.
28. Internal reporting is the preparation of financial reports based on generally accepted
accounting principles
29. Accounting system is often the principal means of gathering data to aid and coordinate
the process of making the best collective operating or routine decisions in light of the
overall goals or objectives of an organiration.
30. An effective accounting system provides information only to internal managers for use
in planning and controlling routine operations and in strategic planning.
31. Data processing includes the preparation of documents (such as checks and invoices),
and the flow of the data contained in these documents through the major accounting
steps of recording, classifying, and summarizing.
32. Information generated or processed by computers is said to be free from any errors,
thus, it possesses the quality of accuracy.
33. Computers can make decisions in the sense of exercising judgment and can choose
among alternatives by following the specific instructions contained in the program.
34. Designing a good accounting system is a specialized job requiring a high degree of skill.
35. Accounting system must contain controls to achieve accuracy, reliability and efficiency.
36. Information system is
provide information for decision making.
37. Data collection via an accounting system facilitates the best collective decision making.
38. A program is a series of steps planned to carry out a certain process, such as the
preparation of a payroll.
39. Accounting machines is usually applied to mechanical or electronic equipment capable
of performing arithmetic functions and not used to produce a variety of accounting
records and reports.
40. The input in a computer-based system corresponds to the journals in a manual system.
41. One of the first steps in the development of an accounting system is the preparation of a
chart of accounts.
42. Accounting system must contain controls to achieve accuracy, honesty, and efficiency,
and speed.
43. The accuracy quality of information refers to the degree to which information is free
from error.
44. Information is said to be complete if the user could accumulate as many information as
possible.
45. Information is said to be timely if it still useful to the decision makers before a decision
has been made.
combination of hardware, software, people and events to
46. Management control systems guides the organizations in designing and implementing
strategies to achieve its objectives
47. A detector is a measuring device that identifies what is actually happening in the
being controlled.
48. Communications network is a part of cost management system that identifies the cost of
process
resources of the firms.
a fo 49. The firm's organizational structure refers to how authority and responsibility for
decision making are distributed.
50. Costs-benefits trade-offs may be considered by managers in designing management
information system.
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- Zina Manufacturing Company started and completed Job 501 in December with the following Job Cost Sheet and transferred it to the warehouse. Direct Materials Date Dec 17 Dec 30 Total Direct Labor Amount Date Amount $2,000 Dec 20 $4,000 8,000 Dec 30 3,800 Total Job Cost Sheet - Job No. 501 Total Cost The journal entry to record the transaction is A) WIP Inventory FG Inventory B) Cost of Goods Sold WIP Inventory C) FG Inventory WIP Inventory D) FG Inventory WIP Inventory Debit Credit 35,800 17,800 17,800 Manufacturing Overhead Date Amount Dec 24 $10,000 Dec 30 8,000 Total 35,800 35,800 17,800 17,800 35,800arrow_forwardHh1.arrow_forwardStill need answers and details for B and C?arrow_forward
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