Management Accounting Overview

In comparing financial and management accounting, which of the following more accurately describes management accounting information?

• historical, precise, useful

• required, estimated, internal

• budgeted, informative, adaptable

• comparable, verifiable, monetary

Management accounting

• is more concerned with the future than is financial accounting.

• is less concerned with segments of a company than is financial accounting.

• is more constrained by rules and regulations than is financial accounting.

• all of the above are true.

To meet decision-making needs, the process of gathering and analyzing information about a company and its competitive environment is known as

• business process reengineering

• process elimination

• business intelligence

• planning

Broadly speaking, cost accounting can be defined as a(n)

• external reporting system that is based on activity-based costs.

• system used for providing the government and creditors with information about a company’s internal operations.

• internal reporting system that provides product costing and other information used by managers in performing their functions.

• internal reporting system needed by manufacturers to be in compliance with Cost Accounting Standards Board pronouncements.

Financial accounting

• is primarily concerned with internal reporting.

• is more concerned with verifiable, historical information than is cost accounting.

• focuses on the parts of the organization rather than the whole.

• is specifically directed at management decision-making needs.

The Institute of Management Accountants’ Code of Ethics

• is a legally enforceable contract with all management accountants.

• should be viewed as a goal for professional behavior.

• is a legally enforceable contract with all CPAs.

• provides ways to measure departures from ethical behavior.

The ethical standards established for management accountants are in the areas of

• competence, licensing, reporting, and education.

• budgeting, cost allocation, product costing, and insider trading.

• competence, confidentiality, integrity, and objectivity.

• disclosure, communication, decision making, and planning.

The primary objective of just-in-time processing is to

• accumulate overhead in activity cost pools

• eliminate or reduce all manufacturing inventories

• identify relevant activity cost drivers

• none of them

A repetitive action fulfilling a business function and increasing the worth of the product and the price that the customer is willing to pay for the product is referred to as a:

• non-value added activity

• value-added activity

• business value-added activity

• activity analysis

JIT manufacturing emphasizes

• large amounts of inventory on hand so that the company does not run out of it

• small amounts of inventory on hand resulting in lower quality goods because production is rushed

• reducing investment in inventory and increasing the emphasis on quality

• both b and c