UM TAGUM COLLEGE

DEPARTMENT OF ACCOUNTING TECHNOLOGY

MAS1- DEPARTMENTAL EXAM
1ST SEMESTER 2016-2017

1. Under which ethical standard of conduct does the managerial accountant have the responsibility to refrain from
either actively or passively subverting the attainment of an organization's legitimate and ethical objectives?
A. integrity C. objectivity
B.competence D. confidentiality

2. In a broad sense, cost accounting can be defined within the accounting system as
A. internal and external reporting that may be used in making nonroutine decisions and in developing plans
and policies.
B. external reporting to government, various outside parties, and stockholders.
C. internal reporting for use in management planning and control, and external reporting to the extent its
product-costing function satisfies external reporting requirements.
D. internal reporting for use in planning and controlling routing operations

3. What is the proper preparation sequencing of the following budgets?

1. Budgeted Balance Sheet
2. Sales Budget
3. Selling and Administrative Budget
4. Budgeted Income Statement
A. 1, 2, 3, 4 C. 2, 3, 4, 1
B 2, 3, 1, 4 D. 2, 4, 1, 3
4. Which of the following is NOT an advantage of budgeting?
A. It forces managers to plan.
B. It provides resource information that can be used to improve decision making.
C. It aids in the use of resources and employees by setting a benchmark that can be used for the
subsequent evaluation of performance.
D. It provides organizational independence.

5. Which of the following statements is correct?

a. An increase in a firm’s inventories will call for additional financing unless the increase is offset by an equal
or larger decrease in some other asset account.
b. A high quick ratio is always a good indication of a well-managed liquidity position.
c. A relatively low return on assets (ROA) is always an indicator of managerial incompetence.
d. A high degree of operating leverage lowers the risk by stabilizing the firm’s earnings stream.

6. In comparing the current ratios of two companies, why is it invalid to assume that the company with the higher
current ratio is the better company?
a. The current ratio includes assets other than cash.

b. A high current ratio may indicate inadequate inventory on hand.

c. A high current ratio may indicate inefficient use of various assets and liabilities.
d.The two companies may define working capital in different terms.