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MANAGEMENT ACCOUNTING

9.
1.

This consists of identifying alternatives, selecting from among the alternatives the one that is best for the organization,
and specifying what actions will be taken to implement the chosen alternative.
a. Controlling
b. Planning
c. Directing
d. Motivating

2.

A detailed report to management comparing budgeted data to actual data for a specific time period is called:
a. Budget
b. Planning report
c. Performance report
d. Controllers report

3.

A member of the top management team who is responsible for providing timely and relevant data to support planning and
control activities and for preparing financial statements for external users.
a. Chief Financial Officer
b. Controller
c. Management Accountant
d. Treasurer

4.

Managerial accounting place less emphasis on _________ and more emphasis on _________ than financial accounting.
a. Planning; nonmonetary data
b. Budges; estimated data
c. Precision; nonmonetary data
d. Estimates; actual data

5.

This involves studying the business processes of companies that are considered among the best in the world in
performing a particular task
a. Business process
b. Benchmarking
c. Nonconstraint
d. Total quality management

6.

A production system in which units are produced and materials are purchased only as needed to meet actual customer
demand is called:
a. Process reengineering
b. Total quality management
c. Benchmarking
d. Just-in-time

7.

Any series of steps that are followed in order to carry out some task in a business
a. Business process
b. Plan-do-check-act-cycle
c. Value-added activities
d. Non-value-added activities

8.

In Process reengineering, two objectives are to simplify and to eliminate:


a. Value-added activities
b. Non-value-added activities
c. Constraint
d. Non-constraint

Anything that prevents an organization or individual from getting more of what it wants:
a. Value-added activities
b. Non-value-added activities
c. Constraint
d. Non-constraint

10. The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are
functioning effectively and moving toward overall company goals.
a. Decentralization
b. Benchmarking
c. Planning
d. Control
11. The delegation of decision-making authority throughout an organization by providing managers at various operating
levels with the authority to make key decisions relating to their area of responsibility.
a. Decentralization
b. Assignment
c. Monitoring
d. Control
12. The manager in charge of the accounting department in an organization
a. Chief Financial Officer
b. Treasurer
c. Controller
d. Vice-President Finance
13. The phase of accounting concerned with providing information to managers for use in planning and controlling operations
and in decision making.
a. Financial accounting
b. Managerial accounting
c. Cost accounting
d. Corporate accounting
14. A visual diagram of a firms organization structure that depicts formal lines of reporting, communication and responsibility
between managers
a. Performance report
b. Budget
c. Cycle diagram
d. Organization chart
15. An approach to improvement that involves completely redesigning business process in order to eliminate unnecessary
steps, reduce errors and reduce costs.
a. Total quality management
b. Process reengineering
c. Life-cycle costing
d. Theory of constraints
16. An approach to continuous improvement that focuses on customers and using teams of front-line workers to
systematically identify and solve problems.
a. Process reengineering
b. Theory of constraints
c. Just-in-time
d. Total quality management

17. A traditional quality control process in manufacturing consists of mass inspection of goods only at the end of a production
process. A major deficiency of the traditional control process is that:
a. It is expensive to do the inspections at the end of the process
b. It is not possible to rework defective items
c. It is not 100% effective
d. It does not focus on improving the entire production process
18. The most important component of quality control is:
a. Ensuring goods and services conform to the design specifications
b. Satisfying upper management
c. Conforming with ISO-9000 specifications
d. Determining the appropriate timing of inspections
19. Management of a company is attempting to build a reputation as a world-class manufacturer of quality products. Which of
the following measures would not be used by the firm to measure quality?
a. The percentage of shipments returned by customers because of poor quality
b. The number of parts shipped per day
c. The number of defective parts per million
d. The percentage of products passing quality test the first time
20. The Code of Ethics for Management Accountants requires a financial manager/management accountant to follow the
established policies of the organization when faced with an ethical conflict. If these policies do not resolve the conflict, the
financial manager/management accountant should:
a. Consult the board of directors immediately
b. Discuss the problem with the immediate superior if (s)he is involved in the conflict
c. Communicate the problem to the authorities outside the organization
d. Contact the next higher managerial level if initial presentation to the immediate superior does not resolve the conflict
Problem Solving
1.

On December 31, 2014, the balance sheet of SG Co. disclosed total assets of P8,000,000, current liabilities of
P1,500,000 and long-term debt of P2,400,000. Ordinary shares outstanding amounted to 500,000 shares. The retained

earnings account indicated a deficit balance of P2,000,000. SGs book value per ordinary share as of December 31, 2014
is: __________
2.

The per share market price of Canon Co. shares on January 1, 2014 was P60 and on December 31, 2014 was P72. Net
income for 2014 was P48,000. Dividends to the preference shareholders for the year totalled P12,000 and dividends of
P2.50 per share were paid on the 6,000 ordinary shares outstanding during the year. The price earnings ratio for
Canon Co. at year end was: __________

3.

The total assets in the Hard Co. on December 31, 2013 were P2.3 million and on December 31, 2014 were P2.5 million.
Income after taxes for 2014 was P188,000. Dividends for 2014 totaled P75,000, interest expenses totalled P70,000 and
the tax rate was 30%. The return on total assets for 2014 (rounded to the nearest tenth of a percentage point) is:_______

For nos. 4-10, refer to the problem:


Complete the balance sheet of Haki Co. based on the following financial data:
Net sales.P 750,000
Total assets turnover3.00 times
Fixed assets turnover5.00 times
Accounts receivable turnover18.75 times
Quick ratio..2.00 times

Cash
Accounts receivable
Inventories
Net fixed assets
Total assets

(4.)
(5.)
(6.)
(7.)
(8.)

Haki Company
Balance Sheet
Accounts payable
Long-term debt
Ordinary share capital
Retained earnings
Total liabilities and shareholders
equity

(9.)
100,000
75,000
50,000
(10.)

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