This is not the document you are looking for? Use the search form below to find more!

Report home > Education

Chapter 1 Managerial Accounting and the Business Environment

0.00 (0 votes)
Document Description
True/False Questions 1. Although financial and managerial accounting differ in many ways, they are similar in that both rely on the same underlying financial data. Answer: True Level: Medium LO: 1 2. Managerial accounting is a branch of financial accounting and serves essentially the same purposes as financial accounting. Answer: False Level: Medium LO: 1 3. Managerial accounting places greater emphasis on the future than financial accounting, which is primarily concerned with the past. Answer: True Level: Easy LO: 1 4. Managerial accounting is not needed in a non-profit or governmental organization. Answer: False Level: Easy LO: 1 5. When carrying out their planning activities, managers select a course of action and specify how the action will be implemented. Answer: True Level: Easy LO: 2 6. When carrying out their planning activities, managers obtain feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change. Answer: False Level: Medium LO: 2 7. The controller occupies a line position in an organization. Answer: False Level: Easy LO: 2 8. Decentralization means the delegation of decision-making authority throughout an organization by allowing managers at various operating levels to make key decisions relating to their own area of responsibility. Answer: True Level: Easy LO: 2
File Details
  • Added: October, 08th 2012
  • Reads: 228
  • Downloads: 0
  • File size: 1.85mb
  • Pages: 860
  • Tags: managerial accounting, business environment, slashtag
  • content preview
Submitter
Embed Code:

Add New Comment




Related Documents

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Test Bank

by: gordonbarbier, 48 pages

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Test Bank

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Solutions Manual

by: gordonbarbier, 48 pages

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Solutions Manual

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Solutions Manual

by: georgesheslers, 48 pages

Managerial Accounting Tools for Business Decision Making Weygandt 5th Edition Solutions Manual

Complete (SOLUTION MANAUL+TEST BANK) for Anderson's Business Law and the Legal Environment, Comprehensive Volume, 21st Edition, David P. Twomey, Marianne M. Jennings

by: smimtb, 97 pages

*************************************************** SEND ME EMAILS: smplustb@gmail.com SEND ME EMAILS: smplustb@gmail.com Home Page: www.smplustb.blogspot.com Home Page: www.smplustb.blogspot.com ...

Donor approaches to improving the business environment for small enterprises

by: monkey, 90 pages

The Working Group on Enabling Environment, established by the Committee of Donor Agencies for Small Enterprise Development in 1992, has taken a closer look at the work ...

Creating a Positive Business Environment for the Informal Economy: Reflections from South Africa

by: samanta, 27 pages

The need for effective support for small enterprise, and for promoting a business environment in which small enterprises can flourish, can be advanced in terms of economic growth, its significance ...

Enterprise Architecture and the Business Rules Life Cycle

by: imogen, 9 pages

This article defines and describes the fundamental Business Rule Lifecyle (BRLC) within an advanced logical and physical integration of Enterprise Architecture (EA) including Enterprise ...

Housing and the Business Cycle

by: samanta, 73 pages

My goal is to provide unforgettable images that leave a lasting impression regarding the importance of housing to what we call the business cycle. Before we get to the displays, I need to ...

Green marketing and the Trade Practices Act

by: williamstt, 30 pages

The purpose of this guide is to educate businesses about their obligations under the Act. It aims to assist manufacturers, suppliers, advertisers and others to assess the strength of any ...

Chapter 3 Information structure and the partition of the sentence

by: alide, 24 pages

This description of information structure as blocks or units of information is the most neutral one in the literature. So far, information structure is defined by (i) the general concept of ...

Content Preview
Chapter 1 Managerial Accounting and the Business Environment


True/False Questions


1. Although financial and managerial accounting differ in many ways, they are similar in
that both rely on the same underlying financial data.

Answer: True Level: Medium LO: 1


2. Managerial accounting is a branch of financial accounting and serves essentially the
same purposes as financial accounting.

Answer: False Level: Medium LO: 1


3. Managerial accounting places greater emphasis on the future than financial
accounting, which is primarily concerned with the past.

Answer: True Level: Easy LO: 1


4. Managerial accounting is not needed in a non-profit or governmental organization.

Answer: False Level: Easy LO: 1


5. When carrying out their planning activities, managers select a course of action and
specify how the action will be implemented.

Answer: True Level: Easy LO: 2


6. When carrying out their planning activities, managers obtain feedback to ensure that
the plan is actually carried out and is appropriately modified as circumstances change.

Answer: False Level: Medium LO: 2


7. The controller occupies a line position in an organization.

Answer: False Level: Easy LO: 2


8. Decentralization means the delegation of decision-making authority throughout an
organization by allowing managers at various operating levels to make key decisions
relating to their own area of responsibility.

Answer: True Level: Easy LO: 2
Garrison, Managerial Accounting, 12th Edition
3

Chapter 1 Managerial Accounting and the Business Environment



9. A firm's organization chart will normally show both the formal and informal lines of
reporting and communication.

Answer: False Level: Easy LO: 2

10. The Chief Financial Officer of an organization is responsible for ensuring that line
operations run smoothly.

Answer: False Level: Medium LO: 2

11. Traditionally, companies have maintained large amounts of raw materials, work in
process, and finished goods inventories to act as buffers so that operations can proceed
smoothly even if there are unanticipated disruptions.

Answer: True Level: Medium LO: 3

12. Process Reengineering is generally considered to be a more radical approach to
improvement than Total Quality Management.

Answer: True Level: Easy LO: 3

13. Process Reengineering emphasizes a team approach involving front-line workers,
whereas Total Quality Management is usually implemented using outside specialists
and is imposed from above.

Answer: False Level: Medium LO: 3

14. If ethical standards were not generally followed, one of the results would probably be
fewer goods and services available in the marketplace.

Answer: True Level: Medium LO: 4

15. The Standards of Ethical Conduct for Management Accountants promulgated by the
Institute of Management Accountants specifically state that management accountants'
sole ethical responsibility is to not break any laws.

Answer: False Level: Easy LO: 4


4
Garrison, Managerial Accounting, 12th Edition

Chapter 1 Managerial Accounting and the Business Environment


Multiple Choice Questions

16. Management accounting focuses primarily on providing data for:

A) internal uses by managers.

B) external uses by stockholders and creditors.

C) external uses by the Internal Revenue Service.

D) external uses by the Securities and Exchange Commission.

Answer: A Level: Easy LO: 1

17. Managerial accounting:

A) is more future oriented than financial accounting.

B) tends to summarize information more than financial accounting

C) is primarily concerned with providing information to external users.

D) is more concerned with precision than timeliness.

Answer: A Level: Easy LO: 1

18. Compared to financial accounting, managerial accounting places more emphasis on:

A) the flexibility of information.

B) the precision of information.

C) the timeliness of information.

D) both A and C above.

Answer: D Level: Easy LO: 1

19. The function of management that compares planned results to actual results is known
as:
A)
planning.


B) directing and motivating.
C)
controlling.


D) decision making.

Answer: C Level: Easy LO: 2

20. Which of the functions of management involves overseeing day-to-day activities?
A)
Planning


B) Directing and motivating
C)
Controlling


D) Decision making

Answer: B Level: Easy LO: 2
Garrison, Managerial Accounting, 12th Edition
5

Chapter 1 Managerial Accounting and the Business Environment


21. Which of the following is not one of the three basic activities of a manager?
A)
Planning

B)
Controlling


C) Directing and motivating
D)
Compiling
management accounting reports

Answer: D Level: Easy LO: 2

22. The delegation of decision making to lower levels in an organization is known as:

A) the planning and control cycle.
B)
controlling.

C)
decentralization.


D) none of these.

Answer: C Level: Easy LO: 2

23. Which of the following statements are false concerning line and staff functions?


I. Persons occupying staff functions have authority over persons occupying line
functions.
II. Both line and staff functions are depicted on the organization chart.
III. Line functions are directly related to the basic objectives of an organization.


A) Only I
B)
Only
II


C) Only I and II

D) I, II, and III

Answer: A Level: Medium LO: 2

24. Which of following would normally be found on a manufacturing company's
organization chart?

A) the layout of the factory assembly lines

B) a list of the materials needed to produce each of the company's products

C) the informal lines of reporting and communication

D) none of the above

Answer: D Level: Easy LO: 2
6
Garrison, Managerial Accounting, 12th Edition

Chapter 1 Managerial Accounting and the Business Environment


25. For a hospital, what type of position (line or staff) is each of the following?



Emergency Room Manager
Human Resources (Personnel) Manager
A) Staff
Staff
B) Staff
Line
C) Line
Staff
D) Line
Line

Answer: C Level: Easy LO: 2

26. A detailed financial plan for the future is known as a:
A)
budget.

B)
performance
report.

C)
organization
chart.

D)
segment.


Answer: A Level: Easy LO: 2

27. A performance report is:

A) a detailed report comparing budgeted data to actual data for a specific time period.

B) a formal statement of plans for the upcoming period.

C) required to be filed monthly by the Securities and Exchange Commission.

D) not used in decentralized organizations.

Answer: A Level: Easy LO: 2

28. A clustering of two or more machines at a single workstation is referred to as:

A) a manufacturing cell.

B) an activity center.

C) a functional layout.
D)
a
setup.


Answer: A Level: Medium LO: 3

29. A focused factory is:

A) a factory that makes only a single product.

B) a factory that performs a single step in the production process and subcontracts the
other steps.

C) a plant layout in which all machines needed to make a particular product are
brought together in one location.

D) required to bid for defense contracts.

Answer: C Level: Easy LO: 3
Garrison, Managerial Accounting, 12th Edition
7

Chapter 1 Managerial Accounting and the Business Environment


30. Large work in process inventories:

A) are essential for efficient operations.

B) reduce defect rates.

C) increase throughput time.

D) are a key part of Just-In-Time systems.

Answer: C Level: Medium LO: 3

31. Ideally, how many units should be produced in a just-in-time manufacturing system?

A) budgeted customer demand for the current week.

B) budgeted customer demand for the following week.

C) actual customer demand for the current week.

D) maximum production capacity for the current week.

Answer: C Level: Medium LO: 3

32. After careful planning, Jammu Manufacturing Corporation has decided to switch to a
just-in-time inventory system. At the beginning of this switch, Jammu has 30 units of
product in inventory. Jammu has 2,000 labor hours available in the first month of this
switch. These hours could produce 500 units of product. Customer demand for this
first month is 400 units. If just-in-time principles are correctly followed, how many
units should Jammu plan to produce in the first month of the switch?
A)
370

B)
400

C)
430

D)
470


Answer: A Level: Medium LO: 3

33. Process Reengineering includes all of the following steps except:

A) constructing a diagram flowcharting the current process.

B) redesigning the process.
C)
elimination
of
non-value-added activities.

D) elimination of all constraints.

Answer: D Level: Hard LO: 3
8
Garrison, Managerial Accounting, 12th Edition

Chapter 1 Managerial Accounting and the Business Environment


34. According to the Theory of Constraints, improvement efforts should usually be
focused on:

A) work centers that are not constraints.

B) the work center that is the constraint.

C) the work center with the highest total cost.

D) the work center with the most obsolete equipment.

Answer: B Level: Medium LO: 3

35. Which of the following is true regarding the theory of constraints?

A) The theory of constraints does not apply to companies with multiple products
because of capacity measurement difficulties.

B) In any profit-seeking company, there must be at least one constraint.
C)
Constraints
or
bottlenecks stop organizations from selling an infinite number of
units or services.

D) both B and C above.

Answer: D Level: Medium LO: 3

36. Pizza World makes forty-three kinds of pizza for takeout and delivery. Which of the
following could be the constraint at Pizza World?

A) the person who makes the pizza crust.

B) the person who puts toppings on the pizzas.

C) the pizza oven.

D) any of the above could be the constraint.

Answer: D Level: Medium LO: 3

37. The Standards of Ethical Conduct for Management Accountants developed by the
Institute of Management Accountants contain a policy regarding confidentiality that
requires management accountants to refrain from disclosing confidential information
acquired in the course of their work:

A) except when authorized by management.

B) in all situations.

C) except when authorized by management, unless legally obligated to do so.

D) in all cases not prohibited by law.

Answer: C Level: Hard LO: 4
Garrison, Managerial Accounting, 12th Edition
9

Chapter 1 Managerial Accounting and the Business Environment


38. Wide-spread adherence to ethical standards in an advanced market economy tends to
result in all of the following except:

A) higher prices.

B) higher quality goods and services.

C) greater variety of goods and services available for sale.
D)
safer
products.


Answer: A Level: Medium LO: 4

39. The Institute of Management Accountants (IMA) has developed ethical standards for
management accountants. What four categories has the IMA classified these standards
into?
A)
Reliability,
Objectivity,
Commitment, and Competence

B) Objectivity, Integrity, Commitment, and Confidentiality

C) Observation, Integrity, Closure, and Competence

D) Competence, Objectivity, Integrity, and Confidentiality
E)
Reliability,
Understandability, Flexibility, and Integrity

Answer: D Level: Medium LO: 4

40. Samantha Galloway is a managerial accountant in the accounting department of
Mustang Industries, Inc. Samantha has just discovered evidence that some of the
corporation's marketing managers have been wrongfully inflating their expense reports
in order to obtain higher reimbursements from the firm. According to the Institute of
Management Accountants' Standards of Ethical Conduct, what should Samantha do
upon discovering this evidence?

A) notify the controller.

B) notify the marketing managers involved.

C) notify the president of the corporation.

D) ignore the evidence because she is not part of the Marketing Department.

Answer: A Level: Hard LO: 4
10
Garrison, Managerial Accounting, 12th Edition

Chapter 2 Cost Terms, Concepts, and Classifications


True/False Questions


1. Manufacturing overhead is an indirect cost with respect to units of product.

Answer: True Level: Medium LO: 1


2. Depreciation on office equipment would not be included in the cost of goods
manufactured.

Answer: True Level: Easy LO: 2,4


3. Rent on a factory building used in the production process would be classified as a
period cost and as a fixed cost.

Answer: False Level: Medium LO: 2,5


4. Period costs are found only in manufacturing companies, not in merchandising
companies.

Answer: False Level: Medium LO: 2


5. Depreciation on equipment a company uses in its selling and administrative activities
would be classified as a product cost.

Answer: False Level: Medium LO: 2


6. If the finished goods inventory increases between the beginning and the end of a
period, then the cost of goods manufactured is smaller than the cost of goods sold.

Answer: False Level: Hard LO: 3,4


7. The cost of goods manufactured is calculated by adding the amount of work in process
at the end of the year to the cost of raw materials used, direct labor worked, and
manufacturing overhead incurred for the year and then subtracting work in process at
the beginning of the year.

Answer: False Level: Medium LO: 4


8. A publisher that sells its books through agents who are paid a constant percentage
commission on each book sold would classify the commissions as a fixed cost.

Answer: False Level: Medium LO: 5
Garrison, Managerial Accounting, 12th Edition
15

Chapter 2 Cost Terms, Concepts, and Classifications



9. Variable costs per unit are affected by changes in activity.

Answer: False Level: Easy LO: 5

10. A cost is either direct or indirect. The classification will not change if the cost object
changes.

Answer: False Level: Medium LO: 6

11. The amount that a manufacturing company could earn by renting unused portions of
its warehouse is an example of an opportunity cost.

Answer: True Level: Easy LO: 7

12. Labor fringe benefits may be charged to direct labor or manufacturing overhead while
overtime premiums paid usually are considered a part of manufacturing overhead.

Answer: True Level: Easy LO: 8 Appendix: 2A

13. The cost of idle time should be charged as direct labor of the job that is in process
when the breakdown occurs.

Answer: False Level: Medium LO: 8 Appendix: 2A

14. Internal failure costs result from identification of defects during the appraisal process.
Such costs may include scrap, rejected products, rework, and downtime.

Answer: True Level: Easy LO: 9 Appendix: 2B

15. ISO 9000 certification is relatively easy to achieve because little documentation on
quality control procedures is needed.

Answer: False Level: Easy LO: 11 Appendix: 2B


16
Garrison, Managerial Accounting, 12th Edition

Document Outline

  • CHAP001
  • CHAP002
  • CHAP003
  • CHAP004
  • CHAP005
  • CHAP006
  • CHAP007
  • CHAP008
  • CHAP009
  • CHAP010
  • CHAP011
  • CHAP012
  • CHAP013
  • CHAP014
  • CHAP015
  • CHAP016

Download
Chapter 1 Managerial Accounting and the Business Environment

 

 

Your download will begin in a moment.
If it doesn't, click here to try again.

Share Chapter 1 Managerial Accounting and the Business Environment to:

Insert your wordpress URL:

example:

http://myblog.wordpress.com/
or
http://myblog.com/

Share Chapter 1 Managerial Accounting and the Business Environment as:

From:

To:

Share Chapter 1 Managerial Accounting and the Business Environment.

Enter two words as shown below. If you cannot read the words, click the refresh icon.

loading

Share Chapter 1 Managerial Accounting and the Business Environment as:

Copy html code above and paste to your web page.

loading