Chapter 01
An Introduction to Managerial Accounting

True / False Questions
 
1. Managers carry out three major activities: planning, implementation, and control. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-02 Strategy
Topic: 01-03 Planning
Topic: 01-04 Implementation
Topic: 01-05 Control
 
2. The theory of constraint (TOC) framework focuses on effectively managing constraints as the key to success. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-24 The Theory of Constraints
 
3. Managerial Accounting reports are prepared for external users while Financial Accounting reports are prepared for internal users. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-07 For the Managers

4. Merchandising firms largely refer to retail and wholesale outlets that buy goods from suppliers and resell them to customers. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
 
5. Merchandising and manufacturing firms generate revenue by selling products. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
 
6. Service firms do not sell any products but generate revenues by offering one or more types of services. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
 
7. Managers assign tasks to employees, arbitrate disputes, answer questions, solve on the spot problems, and make many decisions that affect customers and employees, which in turn, will likely influence future financial and nonfinancial performance. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-04 Implementation

8. Planning involves selecting a course of action and specifying how the action will be implemented. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning
 
9. Control involves 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. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-05 Control
 
10. Strategy pertains to the general direction in which an organization plans to move to achieve its goals and objectives. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-02 Strategy
 
11. Management accountants are not required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-12 Regulation

12. Management accounting information is primarily concerned with reports on the organization while financial accounting focuses more on the individual segments of the organization. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-11 Focus on Segments of an Organization
 
13. The Code of Ethics for Professional Accountants established by the International Federation of Accountants governs only the activities of accountants in public practice. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-27 Ethical Responsibility and Corporate Governance
Topic: 01-28 Professional Ethics
 
14. Performance reports provide formal feedback to assist in determining whether operations and performance are on track. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-05 Control
 
15. Planning includes identifying alternatives and then selecting the one that does the best job of furthering the organization's objectives. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning

16. Reduction in tariffs, quotas, and other barriers to free trade; improvements in global transportation system; and increasing sophistication in international trade markets, are several factors that have led to an increase in worldwide competition in many industries. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-16 Globalization
 
17. One major implication of globalization for many organizations is that they must find new ways of conducting business. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-16 Globalization
 
18. The main idea underlying the lean business model is the elimination of waste. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-17 The Lean Business Model
 
19. Companies that use the just-in-time (JIT) approach purchase materials and produce units only as needed to meet actual customer demand. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach

20. Among other things, companies using the just-in-time (JIT) approach, produce only in response to a customer order meaning that workers will not be idle whenever demand falls below the company's production capacity. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach
 
21. Defects can be tolerated in a just-in-time (JIT) system. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach
Topic: 01-20 Zero Defects and JIT
 
22. There are two major characteristics of total quality management. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-21 Total Quality Management
 
23. Many Canadian organizations have successfully implemented quality management principles and have received recognition from Excellence Canada. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-21 Total Quality Management

24. Process reengineering diagrams a business process in detail, questions it, and then completely redesigns it to eliminate unnecessary steps, reduce opportunities for errors, and reduce costs. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-23 Process Reengineering
 
25. Process reengineering is usually strongly accepted by all employees within an organization. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-23 Process Reengineering
 
26. Effective corporate governance enhances stakeholders' confidence that an organization is being managed in their best interests rather than solely in the interests of top management and certain key individuals. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-29 Corporate Governance
 
27. Codes of ethics almost always provide employees with very specific and detailed instructions about what they can do and not do. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-27 Ethical Responsibility and Corporate Governance
Topic: 01-28 Professional Ethics

28. The PDCA Cycle is a system of continuous improvement in which a planning committee selects from a list of alternatives for improvement and moves to fully implement immediately the chosen improvement. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-22 The Plan-Do-Check-Act Cycle
 
29. The control phase includes preparing budgets for the upcoming period. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-05 Control
 
30. The planning phase includes preparing budgets for the upcoming period. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning
 
31. The control phase includes analyzing actual results, comparing to the budget and identifying why differences occurred. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-05 Control

32. The implementation phase includes analyzing actual results, comparing to the budget and identifying why differences occurred. 
FALSE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-04 Implementation
 
33. Merchandising firms buy and sell finished goods whereas manufacturing firms make their products and then sell them to retailers. 
TRUE

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information

Multiple Choice Questions
 
34. Financial accounting is primarily concerned with: 
A. reporting to external investors and creditors.
B. long term decision making.
C. feasibility analysis.
D. reporting exclusively to internal users.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-07 For the Managers

35. Managerial accounting emphasizes the future in addition to historical reports, whereas financial accounting: 
A. emphasizes a future perspective.
B. emphasizes individual organizational units.
C. emphasizes timeliness.
D. emphasizes a historical perspective.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-10 Emphasis on Timeliness
 
36. In order to eliminate waste, companies must adopt and implement one or more management practices that focus on different aspects of the lean business model such as: 
A. Just-in-Time.
B. maintaining inventories large enough to shield against all unanticipated disruptions.
C. Activity-Based Costing.
D. multi-dimensional performance measurement systems.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-17 The Lean Business Model
 
37. Companies using the just-in-time (JIT) approach hope to achieve: 
A. the hiring of specialized workers to increase production.
B. gains in production flexibility.
C. reduction of costs associated with setup by producing in large batches.
D. reduced defect rates, resulting in less waste and greater customer satisfaction.

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach
Topic: 01-20 Zero Defects and JIT

38. Which of the following is NOT a benefit of a just-in-time (JIT) system? 
A. Funds that have been tied up in inventories can be used elsewhere.
B. Areas previously used to store inventories are made available for other more productive uses.
C. The time required to fill an order is reduced, resulting in quicker response to customers and consequentially greater potential sales.
D. Production workers are always busy.

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach
 
39. Which of the following is a benefit of a just-in-time (JIT) system? 
A. Funds that have been tied up in inventories can be used elsewhere.
B. Scrap costs are reduced.
C. Fewer field warranty visits are required.
D. Production workers are always busy.

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-19 The JIT Approach
 
40. In using total quality management (TQM), the key focus is: 
A. employee focus.
B. management focus.
C. customer focus.
D. executive focus.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-21 Total Quality Management

41. What is the professional designation for most professional accountants in Canada? 
A. Chartered Certified Accountants
B. Chartered Management Accountants
C. Chartered Professional Accountants
D. Certified Public Accountants

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-28 Professional Ethics
 
42. Which of the following is NOT included in Codes of Ethics for professional accountants? 
A. Professional competence
B. Objectivity
C. Compensation
D. Confidentiality

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-28 Professional Ethics
 
43. Corporate governance: 
A. is a department within Canada Revenue with a mandate to ensure all corporations file annual tax returns.
B. if effective, should enhance stakeholders' confidence that the organization is being managed in their best interests.
C. ensures the personal interests of top management are fully achieved.
D. is only important to non-publicly traded companies.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-29 Corporate Governance

44. Benchmarking begins with: 
A. completely redesigning a business process to improve it.
B. determining the constraints within a given manufacturing process.
C. studying organizations that are the best at a task.
D. a determination to only build products to meet specific customer orders.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-21 Total Quality Management
 
45. Activities that do not add value to a product or service that customers are willing to pay for are: 
A. normal business activities.
B. non-value-added activities.
C. part of the overhead costs of a business.
D. a constraint.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-23 Process Reengineering
 
46. A manufacturing business which operates five days per week has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. Maximum weekly output of completed units is? 
A. 440
B. 475
C. 550
D. 675

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-24 The Theory of Constraints

47. The management cycle proceeds in what order? 
A. Control, implementation, planning
B. Planning, implementation, control
C. Implementation, planning, control
D. Implementation, control, planning

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning
Topic: 01-04 Implementation
Topic: 01-05 Control
 
48. A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. Which department would be considered first in looking at ways to improve output capacity? 
A. A
B. B
C. C
D. D

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-24 The Theory of Constraints

49. A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. A consultant has suggested some alternatives to increase output capacities as follows:

Alternative A - increase Department B's output to 200 units per day.
Alternative B - increase Department C's output to 120 units per day.
Alternative C - increase both Department A's and Department C's outputs to 110 units per day.
Alternative D - increase Department D's output to 300 units per day.
Assuming the costs of each alternative are similar and that only one can be chosen, which alternative would yield the best results for the business? 
A. A
B. B
C. C
D. D

Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-24 The Theory of Constraints
 
50. Which of the following statements is not true? 
A. Financial accounting and managerial accounting are independent of each other.
B. Financial accounting, due to the requirements of regulation, is mandatory for businesses.
C. Managerial accounting has a strong orientation towards the future.
D. Financial accounting presents a historical perspective of business activities.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-14 Are Financial and Managerial Accounting Independent?

51. Managerial accounting is regulated by: 
A. GAAP.
B. IFRS.
C. ASPE.
D. no prescribed standards are followed.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-12 Regulation
 
52. A manufacturing company has implemented just in time (JIT) into their process. JIT is part of: 
A. the lean business model.
B. process re-engineering.
C. total quality management
D. the theory of constraints.

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-17 The Lean Business Model
 
53. The implementation phase includes all these activities EXCEPT: 
A. making Short-term and Long-term decisions.
B. selecting a course of action.
C. assign tasks to employees
D. solve on-the-spot problems

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-04 Implementation

54. Which of the following would be an implementation activity? 
A. Hiring replacement employees.
B. Developing a new budget
C. Variance analysis
D. Developing the strategic plan

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-04 Implementation
 
55. The planning phase includes all these activities EXCEPT: 
A. organizing and allocating resources.
B. selecting a course of action.
C. identifying alternatives
D. preparing budgets.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning
 
56. The implementation phase includes: 
A. organizing and allocating resources.
B. selecting a course of action.
C. identifying alternatives
D. preparing budgets.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-04 Implementation

57. A cost report which focuses on a 10% reduction of costs in the upcoming period is an example of: 
A. a company's vision
B. a company's mission
C. a company's strategy
D. a company's objectives.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-02 Strategy

Short Answer Questions
 
58. List four major potential benefits of successfully implementing a just-in-time (JIT) system in a manufacturing company. 
1. substantial reduction in inventory ordering and warehousing costs.
2. reduction in waste due to inventory obsolescence and pilferage.
3. a commitment to zero defects.
4. a reduction in time to complete a product.

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-18 Just-in-Time
Topic: 01-19 The JIT Approach

59. List seven key differences between Managerial Accounting and Financial Accounting. 
1. managerial accounting reports are prepared primarily for managers inside the organization, whereas financial accounting reports are typically prepared for the use of external parties, such as shareholders, creditors and regulatory bodies.
2. managerial accounting is not a mandatory requirement for businesses while financial accounting is.
3. managerial accounting is not regulated by prescribed standards or formats while financial accounting must follow prescribed accounting standards.
4. managerial accounting usually focuses on the parts or segments of an organization while financial accounting is primarily concerned with reporting the activities of the organization.
5. managerial accounting usually has a strong future orientation while financial accounting has a historical perspective.
6. managerial accounting emphasizes obtaining data relevant to decision making while financial accounting emphasizes the verifiability of data.
7. managerial accounting requires information to be available on a timely basis while financial accounting, with its historical perspective, focuses on precision.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-07 For the Managers
Topic: 01-08 Emphasis on the Future
Topic: 01-09 Relevance and Flexibility of Data
Topic: 01-10 Emphasis on Timeliness
Topic: 01-11 Focus on Segments of an Organization
Topic: 01-12 Regulation
Topic: 01-13 Managerial Accounting - Not Mandatory
Topic: 01-14 Are Financial and Managerial Accounting Independent?
 
60. Describe factors that have led to an increase in worldwide competitiveness as part of the globalization on business. 
Reduction of tariffs, quotas, and other barriers to free trade; improvements in global transportation systems; and increasing sophistication in international trade markets. These factors help to reduce the costs of conducting international trade and make it possible for foreign companies to compete on a more equal footing with domestic firms.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-16 Globalization

61. Explain the lean business model and its corresponding management practices and potential benefits. 
Many businesses in order to remain competitive in the global marketplace, have adopted the lean business model which focuses on the elimination of waste. This consists of implementing management practices, such as just-in-time and total quality management, which if properly implemented can enhance quality, increase efficiencies, eliminate delays and reduce costs.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-17 The Lean Business Model
 
62. Explain the importance of ethical responsibility and explain the need for ethical codes of conduct. 
Unethical behaviour is often the result of top executives focusing exclusively on short-term profits at any cost. As businesses interact more and more, being ethically responsible is extremely important. Many organizations have implemented ethical codes of conduct to guide behaviour.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Understand the importance of professional responsibility.
Topic: 01-27 Ethical Responsibility and Corporate Governance
Topic: 01-28 Professional Ethics
 
63. List four management practices (programs of continuous improvement) that may be used to achieve the objectives of the lean business model. 
1. just-in time.
2. total quality management.
3. process reengineering.
4. theory of constraints.

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting.
Topic: 01-17 The Lean Business Model

64. Determine if the following is an emphasis of managerial (M) or Financial (F) accounting:

1. Estimating the amount of materials needed for next month's production.
2. Information in reports focuses on objectivity and verifiability.
3. Reports follow GAAP or IFRS.
4. Precise information that is more readily available is included in reports.
5. The focus and reporting emphasize segments of an organization.
6. Organizations may follow their own guidelines for reports generated. 
1. M
2. F
3. F
4. F
5. M
6. M

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-06 Financial and Managerial Accounting
Topic: 01-07 For the Managers
Topic: 01-08 Emphasis on the Future
Topic: 01-09 Relevance and Flexibility of Data
Topic: 01-10 Emphasis on Timeliness
Topic: 01-11 Focus on Segments of an Organization
Topic: 01-12 Regulation
Topic: 01-13 Managerial Accounting - Not Mandatory
Topic: 01-14 Are Financial and Managerial Accounting Independent?

65. Classify the following activities as planning (P), implementation (I), or control (C).

1. Estimating the number of units that will be sold in the upcoming quarter.
2. Assigning production line workers to stations in the production plant.
3. Choosing between manual labor or purchasing a machine that will automate the production process.
4. Preparing a performance report which compares actual sales to budgeted sales for the last month.
5. Solving a bottleneck issue in the production plant by moving one production line worker from station 2 to station 5 on the production line.
6. Negotiating discounts with suppliers for materials needed in the production process. 
1. P
2. I
3. P
4. C
5. I
6. I

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-01 Understand the basics of managerial accounting.
Topic: 01-03 Planning
Topic: 01-04 Implementation
Topic: 01-05 Control