SET A

1. _______ is the practice of accounting in which the accountant develops and uses cost
management information.
A. Competitive Advantage
B. Cost Management
C. Strategic Management
D. Strategic Planning

2. Which of the following is not an important principle of TQM?

A. The organization should focus on improving goods from the consumer’s viewpoint.
B. Everyone in the organization is required to participate.
C. There should be a system of planning, controlling, and decision making.
D. Complacency is a norm.

3. _______ is used to develop a detailed description of the specific activities performed in

the operation of the firm.
A. Profitability Analysis
B. Ethical Issues Analysis
C. Activity Analysis
D. Customer Satisfaction

4. A key competitive edge that forms have is the ability to deliver the product, or service
faster that the competition. This is known as _____.
A. Economic Order Quantity
B. Speed-To-Market
C. Freight In
D. Lead Time

5. The cost of downtime on machines while rework performed is a(n) _____.

A. Appraisal Cost
B. External Failure Cost
C. Internal Failure Cost
D. Prevention Cost

6. Value engineering can result in

A. Product redesign
B. Changes in materials specifications.
C. Modifications in process methods.
D. All of the above

7. Statement 1. The growing number of alliances among large multinational, increasing

trade agreements among countries indicate clearly that the opportunities for growth and
profitability lie in local markets.
Statement 2. Global business environment is very competitive and firms need cost
management information to sustain competitiveness. They need only financial
information in doing business and competing effectively.
A. Statement 1 is True, Statement 2 is False
B. Statement 1 is False, Statement 2 is True
C. Both Statements 1 and 2 are True
D. Both Statements 1 and 2 are False

8. A more radical approach to improvement than TQM, is an approach where a business

process is diagrammed in detail, questioned and then completely redesigned in order to
eliminate unnecessary steps, to reduce opportunities for errors and to reduce costs.
A. Balanced Scorecard
B. Benchmarking
C. Total Quality Management
D. Process Reengineering

9. Practitioners of management accounting and financial management have a

responsibility to refrain from engaging in any activity that would prejudice their ability to
carry out their duties ethically.
A. Integrity
B. Competence
C. Confidentiality
D. Objectivity

10. The following are consequences of a lack of strategic information, except

A. Leck of clarity about direction and goals
B. Failure to identify most profitable products, customer and markets.
C. Lack of clear and favorable perception of the firm by customer and suppliers.
D. Correct investment decisions; choosing products, markets or manufacturing processes.

11. Practitioners of management accounting and financial management have a

responsibility to recognize and communicate professional limitations or other
constraints that would preclude responsibility judgment or successful performance of an
activity.
A. Integrity
B. Competence
C. Confidentiality
D. Objectivity

12. ______ work closely with managers in formulating strategy by providing information
about the sources of competitive advantages – for example, the cost, productivity, or
efficiency advantage of their company relative to competitors.
A. Management Accountant
B. Chef Accountant
C. Chief Financial Officer
D. Controller

13. An approach to developing new ways to perform existing activities is called

A. Process Value Analysis
B. Reengineering
C. Caveat Analysis
D. Benchmarking
14. Ideally, the number of units that should be produced in a just-in-time manufacturing
system is equal to
A. The maximum productive capacity for the current period.
B. Actual customer demand for the current period.
C. Budgeted customer demand for the current period.
D. Budgeted customer demand for the following period.

15. The following are the basic functions of controllership, except

A. Resources Custody
B. Planning
C. Reporting
D. Accounting

16. Responsibilities includes managing the financial risk of interest-rate and exchange-
rate changes and derivatives management.
A. Treasury
B. Risk Management
C. Controllership
D. Chief Accountant

17. _______ are the accounting professionals who develop and analyze cost
management information and other accounting information.
A. Chief Financial Officer
B. Management Accountant
C. Controllership
D. Chief Accountant

18. A technique by which companies analyze fluctuations in a process called:

A. Statistical Process Control
B. A Quality Audit
C. Benchmarking
D. Pareto Analysis

19. The _______ is an analysis tools that firms use to identify the specific steps required
to provide a product or service of a company.
A. Product Innovation
B. Competitive Advantage
C. Strategic Management
D. Value Chain

20. ______ is the practice of the established science of control which is the process by
which management assures itself that the resources are procured and utilized according
to plans in order to achieve the company’s objectives.
A. Chief Financial Officer
B. Management Accountant
C. Controllership
D. Internal Auditor

21. The cost caused by inefficiency in prevention activities are:

A. Nonvalue-added costs
B. Value-added costs
C. Neither nonvalue-added or value-added costs
D. Both nonvalue-added or value-added costs

22. Non-financial measures of operation include among others, except

A. Growth Opportunities
B. Product Quality
C. Earnings Per Share
D. Customer Satisfaction

23. The following are the financial benefits that provided by Just-In-Time, except
A. Reduction in paperwork
B. Lower investment in inventories
C. Marketing, promotion, and distribution
D. Higher revenues as a result of responding faster to customer

24. One major problem in measuring productivity in not-for-profit organizations is the

absence of revenue as the:
A. Common measure for inputs
B. Common measure for outputs
C. Basis for financial reporting
D. Common denominator with commercial firms

25. A _____ means that the management accounting system should produce information
about both realization and sacrifice. The system should be able to measure various
attributes of customer value.
A. Superior product through differentiation
B. Cost leadership
C. Focus on customer value
D. Strategic focus on cost management

26. Continuous improvement is synonymous with

A. Process benchmarking
B. Total quality management
C. Management by objectives
D. Management by exception

27. The two major characteristics of Total Quality Management are (1) ______ and (2)
systematic problem-solving using teams made up of front-line workers.
A. focus on customer
B. cost leadership
C. product differentiation
D. competitive advantage
28. Changes in the productivity of different types of resources are not always:
A. Measurable and observable
B. In the same direction or at an equal pace
C. Unique and differentiated
D. Simultaneous and positive

29. Practitioners of management accounting and financial management have a

responsibility to maintain an appropriate level of professional competency by ongoing
development of their knowledge and skills.
A. Integrity
B. Competence
C. Confidentiality
D. Objectivity

30. It is contemporary business environment, cost management focuses on

A. Financial reporting and cost analysis
B. Common emphasis on standardization and standard costs.
C. Development and implementation of the business strategy.
D. All of the given choices.

31. The also called the finance director in many countries - is the executive responsible
for overseeing the overall operations of an organization.
A. Chief Executive Officer
B. Chief Operating Officer
C. Chief Financial Officer
D. Controller

32. The goal of total quality control is

A. To have less defective material than good material
B. To permit defects as long as they do not exceed a certain level
C. To have zero defect
D. All of the given choices

33. A _____ is a set of policies, procedures and approaches to business that produce
long-term success.
A. Vision
B. mission
C. planning
D. strategy

34. A primary objective in measuring productivity is to improve operations either by

using fewer inputs to produce the same output, or to produce:
A. More effectively
B. With fewer constraints
C. More outputs with the same inputs
D. More outputs with more inputs

35. The following are three important guidelines help management accountants provide
the most value when scorekeeping, problem-solving and attention directing (interpreting
and reporting). Which is not included in guideline?
A. Use appropriate cost concepts for different purpose
B. Employ a cost-benefit approach
C. Cost leadership and differentiation
D. Recognize behavioral as well as technical considerations

36. _____ has broad focus. It includes - but it not confined to the continuous reduction of
costs.
A. Cost Accounting
B. Cost Management
C. Costing
D. Cost Analysis
37. _____ involves the determination of the desired cost for a product or the basis of a
given competitive price so that the product will earn a desired profit.
A. Product Costing
B. Absorption Costing
C. Target Costing
D. Life-cycle Costing

38. _____ is a set of policies, procedures and approaches to business that produce long-
term success.
A. Management
B. Strategy
C. Planning
D. Control

39. Some companies compete on the providing a quality product or services at low
prices. This is also known as _____ strategy
A. Focus on customer
D. Competitive advantage
B. Cost leadership
C. Product differentiation

40. The _____ emphasizes the importance of managing the organization's constraints or
barriers that hinder or impede progress toward an objective.
A. Total Quality Management
B. Process Reengineering
C. Activity-Based Manufacturing
D. Theory of Constraints

41. Strategic planning is different from operational planning in that operational planning:
A. Involves large sums of money
B. Deals with determining production levels for next quarter
C. Involves only long-range goals
D. Operational and strategic planning are the same

42. An advantage of partial measures of productivity is that it:

A. Allows managers to focus on the use of a particular Input
B. Is a complex measure that is difficult to interpret be everyone in the organization.
C. Looks at the effect of multiple inputs
D. Is a perfect measure of performance

43. Which of the following emerging themes in cost accounting deals with managers
striving to create an environment which will enable workers to manufacture perfect (zero
defect) products.
A. Customer orientation
B. Global competition
C. Total quality management
D. Advance in information technology

44. _____ is the authority to command action or give orders to subordinates.

A. Line Authority
B. Line Manager
C. Staff Authority
D. Staff Manager

45. _____ is a manufacturing system that totally integrates all office and factory functions
within a company via a computer-based information network to allow hour-by-hour
manufacturing management.
A. Computer-aided design
B. Computer-aided manufacturing
C. Computer-integrated manufacturing
D. Flexible manufacturing system
46. Which of the following represents an external failure cost?
A. Reprocessing a defective product before shipment
B. Replacing a defective product after shipment
C. Hiring for quality
D. Inspecting products during production

47. _____ is concerned with the acquisition, financing and management of assets of a
business concern to maximize the wealth of the firms for its owners.
A. Chief Financial Officer
B. Management Accountant
C. Controllership
D. Treasurership

48. The Process Reengineering can yield the following anticipated results, except
A. Process is completed in less time
B. Opportunities for errors are reduced
C. Process is eliminated
D. Costs are reduced.

49. In JIT, the flow of goods is controlled by a "pull" approach. It means that
A. Work is initiated only in response to customer orders.
B. Customers are pulled to buy more units to reduce the company's inventory.
C. Production supervisors see to it that there is always something to do to keep everyone busy.
D. Warehouses should always be full to be sure that customer demands are always met.

50. Certified Management Accountant are required to adhere to the following ethical
standards, except
A. Integrity
B. Ingenuity
C. Confidentiality
D. Objectivity