Overview

Management advisory services

1. The primary purpose of management advisory services is to
A. conduct special studies, preparation of recommendations, development of plans and programs, and
provision of advice and assistance in their implementation.
B. provide services or to fulfill some social need.
C. improve the client's use of its capabilities and resources to achieve the objectives of the organization.
D. earn the best rate of return on resources entrusted to its care with safety of investment being taken into
account and consistent with the firm's social and legal responsibilities.

1. The following characterize management advisory services except

A. involve decision for the future
B. broader in scope and varied in nature
C. utilize more junior staff than senior members of the firm
D. relate to specific problems where expert help is required

2. Which of the following is not classifiable as a management advisory service by CPA?

A. Systems design. C. Make or buy analysis.
B. Project feasibility study. D. Assistance in budget preparation.

2. Which of the following statement is false?

A. CPA’s provide management services to go around the ethical constraints as mandated by the Accountancy
Act.
B. Businesses hire management consultants to help define specific problems and develop solutions
C. Included in the practice of consulting is the provision of confidential service in which the identity of the client
is concealed
D. CPA’s performing management services may be considered to be in the practice of management consulting

Management accounting & financial accounting

1. Which of the following characteristics is inherent to management accounting?
A. Reporting of historical information
B. Compliance to generally accepted accounting principles
C. Contribution approach income statement
D. External users of financial report

3. The following are characteristics of financial accounting, except?

A. Reporting of historical information
B. Compliance to generally accepted accounting principles
C. Contribution approach income statement
D. External users of financial report

4 The following are inherent to either management accounting or financial accounting:

1. External report
2. Historical information
3. Contribution approach income statement
4. Generally accepted accounting principles
5. Prospective financial statements
Which of the foregoing are related to management accounting and financial accounting respectively?
A. B. C. D.
Management Accounting 1, 2, 5 3, 5 2, 3 3
 Financial Accounting 3, 4 1, 2, 4 1, 4, 5 1, 2, 4, 5

5. The costing method that is properly classified for both external and internal repotting purposes is
External reporting Internal reporting
Activity-based costing Yes Yes
Variable costing Yes No
Process costing No Yes
Standard costing Yes No

Quality Costs
6. The cost of statistical quality control in a product quality cost system is
A. training cost C. appraisal cost
B. internal failure cost D. prevention cost

Activity-based Costing
7. The last step in activity-based costing is to
A. identity the major activities that pertain to the manufacture of specific products
B. allocate manufacturing overhead costs to activity cost pools
C. Identify the cost drivers that accurately measure each activity’s contribution to the finished product
D. Assign manufacturing overhead costs for each activity cost pool to products