TRUE OR FALSE
Extracted 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. CS Scanned with CamScanner
Extracted 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. CS Scanned with CamScanner