Q1 Ms. Greengrass is preparing the budget for the H.R. Department, of which she is manager. She has taken last years' budget and critically examined each item to see if this year's activities should be reflected in the same amount, a higher, or a lower figure. She is using __________.

1 point

a) zero-based budgeting

b) Kaizan budgeting

c) benchmarking

d) incremental budgeting

e) none of the above

Q2 Financial accounts are commonly presented on a yearly basis. This reflects which of the following accounting concepts?

1 point

a) Business entity

b) Matching

c) Disclosure

d) Periodicity

e) None of the above

Q3 Which of the following managers need to have a basic knowledge of accounting?

1 point

a) The chief financial officer

b) The vice-president for Human Resource Management

c) Production staff

d) All managers

e) none of the above

Q 4 Monica's Mantles planned to spend $100,000 designing new mantles to keep ahead of fashion trends. This would appear in which section of the balanced scorecard?

1 point

a) Financial perspective

b) Customer perspective

c) Internal operations perspective

d) Learning & growth perspective

e) None of the above

Q5 Comparing actual results with planned results and taking appropriate action are the functions of __________.

1 point

a) budgeting

b) the budget committee

c) the balanced scorecard

d) budgetary control

e) none of the above

Q6 Ms. Greengrass has observed that the number of employment interviews carried out by her department over the last 5 years has been 2,000; 2,040; 2,081; 2,122; and 2,165. The year-on-year increase over the last 5 years was __________.

1 point

a) 40%

b) 33%

c) 10%

d) 2%

e) none of the above

Q7 If Ms. Greengrass's staff can carry out 5 employment interviews per day and there are 250 working days in the year, how many interview staff does she need in a year when 2,500 employment interviews are planned?

1 point

a) 1

b) 2

c) 5

d) 10

e) none of the above

Q8 ____________ is one of the main purposes of financial accounting.

1 point

a) Score-keeping

b) The balance sheet

c) The Canadian Institute of Chartered Accountants

d) The Toronto Stock Exchange

e) None of the above

Q 9 In the budget preparation process, inventories __________.

1 point

a) are a necessary evil

b) can be eliminated through just-in-time management

c) are part of long-term assets, as the company always has some inventory

d) allow sales decisions and production decisions to be somewhat independent

e) none of the above

10 ) Monica's Mantles is planning to buy 22,000 mantles next year at a cost of $50 each. At the beginning of December she will owe $100,000 to suppliers. Purchases in December will be 2,500 mantles, and sales for the month will be 2,200 mantles. She takes one month's credit from her suppliers. The cash paid to suppliers in December will be __________.

1 point

a) $100,000

b) $110,000

c) $125,000

d) $150,000

e) none of the above

11) Issuing shares and borrowing money is part of the ______________ function.

1 point

a) financial accounting

b) management accounting

c) personal financial planning

d) finance

e) none of the above

12) Ms. Greengrass has observed that the number of employment interviews carried out by her department over the last 5 years has been 2,000; 2,040; 2,081; 2,122; and 2,165. Based on the year-on-year increase over the last 5 years, the best estimate of the number of employment interviews to be carried out this year is __________.

1 point

a) 2,165

b) 2,208

c) 2,250

d) 2,260

e) none of the above

13) The balanced scorecard is __________.

1 point

a) one of the four financial statements required to be published

b) a useful way of linking strategy and control

c) limited to financial outcomes

d) purely qualitative

e) none of the above

14 ) Sales at Monica's Mantles last year were $2,400,000. Assume that the sales occurred evenly throughout the year. Assume also that customers owed $200,000 at the start of the year, and that all customers took one month to pay. There were no bad debts or late payers. Cash collection from customers in the year was __________.

1 point

a) $2,000,000

b) $2,200,000

c) $2,400,000

d) $2,500,000

e) none of the above

15) Accounting information that has the power to influence a decision would be called ____________.

1 point

a) relevant

b) precise

c) matching

d) reliable

e) none of the above

16) Budgets are a key feature of

1 point

a) scorekeeping

b) planning

c) control

d) all of the above

e) (b) & (c), but not (a)

17) Jemima's Outfits has a store in Dixie Outlet Mall. It specializes in high-class ladies fashions and sells complete outfits for a uniform price of $75 each. The sales budget for 2007 was to sell 6,000 outfits. If the owners (i) set objectives, (ii) gather data through a questionnaire, and (iii) report the difference between the objectives and the actual results in respect of "perception of value for money", this would be part of reporting on the perspective __________.

1 point

a) financial

b) customer

c) internal business

d) learning & growth

e) none of the above

18) Jemima's Outfits has a store in Dixie Outlet Mall. It specializes in high-class ladies fashions and sells complete outfits for a uniform price of $75 each. The sales budget for 2007 was to sell 6,000 outfits. If the owners control the activities of the store through a combination of financial, customer, internal business process and learning & growth perspectives, they are using __________.

1 point

a) a balanced scorecard approach

b) a financial control approach

c) motivational management

d) zero-based budgeting

e) none of the above

19) A budget that is being used for budgetary control should be __________.

1 point

a) linked to the operating activities over which managers have influence or control

b) short

c) zero-based

d) Kaizan-based

e) none of the above

20) Budgeted cash payments would include

1 point

a) payments to suppliers

b) wages and salaries

c) expenses paid in cash

d) depreciation/amortization

e) (a), (b) & (c), but not (d)

21) Important uses for accounting information include

1 point

a) score-keeping

b) attention directing

c) decision support

d) (a) & (b), but not (c)

e) (a), (b) & (c)

22) The role of the auditor of a company is

1 point

a) to identify fraud

b) to prosecute criminal managers

c) to attest that the financial statements were prepared fairly and truly

d) to calculate the tax liability

e) none of the above

23) Management accounting is concerned with

1 point

b) reporting to internal users, such as managers

a) reporting to external users, such as shareholders

d) personal financial planning

e) none of the above

c) reporting to the Statistics Office of the Federal Government

24) Using accounting for decision support within the organization requires _______________.

1 point

a) general purpose financial reports such as the income statement and the balance sheet

b) specialized reports

c) budgets

d) personal financial planning

e) none of the above

25) Reliable accounting information would be ____________.

1 point

a) verifiable

b) neutral

c) relevant

d) (a) & (b), but not (c)

e) (a), (b) & (c)

26) You are trying to decide whether or not to open a new store in a mall that is under construction. The mall developer has provided you with a forecast of the number of customers who will visit the mall in the next five years; this information is ____________.

1 point

a) relevant

b) reliable

c) verifiable

d) (a) & (b), but not (c)

e) (a), (b) & (c)

27) Budgeted cash receipts would include

1 point

a) cash sales

b) collection of accounts receivable

c) proceeds of sale of fixed assets

d) repayment of bank loans

e) (a), (b) & (c), but not (d)

28) Two parts of the master budget are __________.

1 point

a) forward and backward looking

b) the operating budget and the financial budget

c) internal and external

d) planning and control

e) none of the above

29) Recognizing revenues in the period when they are earned, rather than the period when the cash is received, is an example of which accounting concept?

1 point

a) Business entity

b) Matching

c) Conservatism

d) Historic cost

e) None of the above

30) Step one in preparing the budget for an organization is normally __________.

1 point

a) estimate the sales

b) estimate the % wage increase

c) estimate the % inflation rate

d) estimate the production quantities and inventory levels

e) none of the above

31) Because investors entrust their resources to professional managers, they need accounting for purposes of

1 point

a) scorekeeping

b) attention directing

c) decision support

d) (a) & (b), but not (c)

e) (a), (b) & (c)

32) Budgeting for the cost of direct labour __________.

1 point

a) should include employer's contributions to pension schemes

b) should be done before production planning

c) is not important, as labour is a fixed cost

d) is the sole responsibility of the human resource department

e) none of the above

33) Do good decisions lead to good outcomes?

1 point

a) No, the world is too random to predict anything.

b) Not always, but there is a strong likelihood

c) Yes, always.

d) It depends on the weather.

e) None of the above.

34) Managers should be held responsible for __________.

1 point

a) all items in their budgets over which they have control

b) all items in their budgets, even if they cannot control them

c) sales revenues, but not expenses

d) expenses, but not sales revenues

e) none of the above

35) The ratio of operating income to total assets is ____________

1 point

a) a profitability ratio

b) always 2:1 or more

c) a cash flow concept

d) part of the income statement

e) none of the above

36) Sales forecasting can be done on which of the following basis?

1 point

a) Year-on-year percentages

b) Graphs

c) Regression analysis

d) Managers' estimates

e) All of the above

37) As at 31/12/2007, Topline Co. has assets of $100,000 and liabilities of $25,000. Topline Co.'s owners' equity was ____________.

1 point

a) $75,000

b) $50,000

c) $25,000

d) unclear (there is something wrong with the calculations as the accounting equation does not balance)

e) none of the above

38) Last year, Monica's Mantles sold 20,000 mantles at $120 each, for a total of $2,400,000. This year she expects to increase sales volume by 10%, and to increase the selling price by $5 per mantle. Expected sales revenue for this year is __________.

1 point

a) $2,400,000

b) $2,500,000

c) $2,600,000

d) $2,750,000

e) none of the above

39) Investors buy shares in Quietus Ltd. for $5 million. $3 million is spent on assets on Day One of the company's operations. At that point in time the equity is ____________.

1 point

a) $8 million

b) $5 million

c) $3 million

d) $2 million

e) none of the above

40) The balanced scorecard reports on organizational variables that are __________.

1 point

a) a balance between past, present and future

b) a balance between financial and non-financial

c) a balance between internal and external

d) (a) & (b), but not (c)

e) (a), (b) & (c)

41) Financial accounting is concerned with

1 point

a) reporting to external users, such as shareholders

b) reporting to internal users, such as managers

c) reporting to the Statistics Office of the Federal Government

d) personal financial planning

e) none of the above

42) Cash budgeting is important because __________.

1 point

a) cash is a good predictor of profitability

b) if the organization runs out of cash it will be forced into bankruptcy

c) cash is a scarce resource

d) the shareholders have invested cash in the company

e) none of the above

43) The difference between actual results and planned results is called __________.

1 point

a) management by objectives

b) a variance

c) a disaster

d) the master budget

e) none of the above

44) The statement of cash flows is very important because ____________

1 point

a) only profitable companies survive

b) profitability is measured by the income statement

c) managing cash resources is critical to company survival

d) it is prepared on an annual basis

e) none of the above

45) ___________ is one of the financial reports that are produced by a company for public use.

1 point

a) The balance sheet

b) The budget

c) The external audit

d) Attention directing

e) None of the above

46) Jemima's Outfits has a store in Dixie Outlet Mall. It specializes in high-class ladies fashions and sells complete outfits for a uniform price of $75 each. The sales budget for 2007 was to sell 6,000 outfits. If the owners control the activities of the store exclusively through standard cost variances, they are using __________.

1 point

a) a balanced scorecard approach

b) a financial control approach

c) motivational management

d) zero-based budgeting

e) none of the above

47) The objective of the balanced scorecard is to __________.

1 point

a) assess the company's progress towards its strategic objectives

b) assess the change in cash balance

c) measure profitability for the year

d) calculate the owners' wealth at a point in time

e) none of the above