1-1 Test Bank for Davis & Davis, Managerial Accounting, 4/e
TEST BANK
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Managerial Accounting 4th Edition
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By Charles Davis Elizabeth Davis Chapter 1 - 13
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, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Table Of Contents jl jl
1. Accounting as a Tool for Management
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2.Cost Behavior and Cost Estimation
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3. Cost-Volume-Profit Analysis and Pricing Decisions
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4. Product Costs and Job Order Costing
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5. Planning and Forecasting
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5A: Planning and Forecasting in a Retail Setting* (online only)
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6. Performance Evaluation: Variance Analysis
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7. Activity-Based Costing and Activity-Based Management
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8. Using Accounting Information to Make Managerial Decisions
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9. Capital Budgeting
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10. Decentralization and Performance Evaluation
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11. Performance Evaluation Revisited: A Balanced Approach
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12. Financial Statement Analysis
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13. Statement of Cash Flows
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,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Chapter 1 jl
Accounting as a Tool for Management jl jl jl jl jl
CHAPTER LEARNING OBJECTIVES jl jl
1. Define managerial accounting (Unit 1.1) jl jl jl jl
There are several formal definitions of managerial accounting. A simple one is “thege
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neration of relevant information to support management’s decision- jl jl jl jl jl jl jl
making activities.” jl
2. Describe the differences between managerial and financial accounting(U jl jl jl jl jl jl jl jl
nit 1.1) jl
Managerial accounting’s primary users are managers and decision makers within an organi jl jl jl jl jl jl jl jl jl jl jl
zation, whereas financial accounting is aimed primarily at external users. Unlike GAAP that
jl jl jl jl jl jl jl jl jl jl jl jl jl
guides financial accounting, there are no mandated rules in managerial accounting. Manag
jl jl jl jl jl jl jl jl jl jl jl
erial accounting reports focus on operating segments, while financialaccounting statement
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s report results for the organization as a whole. Managerial accounting is concerned more w
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
ith projecting future results than reporting past results. Managerial information is prepare
jl jl jl jl jl jl jl jl jl jl jl
d to take advantage of a window of opportunity, evenif some accuracy must be sacrificed. Fi
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nancial accounting information is balanced to the penny and is delivered after the end of th
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e accounting period.
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3. List and describe the four functions of managers (Unit 1.1)
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Planning means setting a direction for the organization. Long- jl jl jl jl jl jl jl jl
term, or strategic planningprovides direction for a five- to ten-year period. Short-
jl jl jl jl jl jl jl jl jl jl jl jl
term or operational planning provides more detailed guidance for the coming year; it transl
jl jl jl jl jl jl jl jl jl jl jl jl jl
ates the company’s strategy into action steps. Controlling is the monitoring of day-to-
jl jl jl jl jl jl jl jl jl jl jl jl
day operations to identify any problems that require corrective action. Evaluating is the pro
jl jl jl jl jl jl jl jl jl jl jl jl jl
cess of comparing a particular period’s actual results to planned results, for the purpose of a
jl jl jl jl jl jl jl jl jl jl jl jl jl jl jl
ssessing managerial performance. Decision making means choosing between alternative c
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ourses of action. jl jl
4. Explain how the selection of a particular business strategy determines theinf jl jl jl jl jl jl jl jl jl jl jl
ormation that managers need to run an organization effectively (Unit 1.2) jl jl jl jl jl jl jl jl jl jl
To run a business effectively, managers need information that shows how well operatio
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ns are meeting the organization’s strategic goals. For instance, if the organization’s strat
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egy is to be a low- jl jl jl jl jl
cost producer, information about product costsand cost variances will be more useful t
jl jl jl jl jl jl jl jl jl jl jl jl jl
o managers than information about researchand development.
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, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
5. Discuss the importance of ethical behavior in managerial accounting (Unit1.3
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)
Ethical behavior means knowing right from wrong and then doing the right thing. Manyco
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
mpanies and most professional organizations have codes of conduct to guide employees’
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actions. Acting unethically can lead to illegal activity and ultimately to the destruction of th
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
e firm. Furthermore, research has shown that a public commitment toethical behavior can
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
lead to superior financial performance.
jl jl jl jl
TEST BANK
jl
Managerial Accounting 4th Edition
jl jl jl jl
By Charles Davis Elizabeth Davis Chapter 1 - 13
jl jl jl jl jljljl jl jl jl
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Table Of Contents jl jl
1. Accounting as a Tool for Management
jl jl jl jl jl jl
2.Cost Behavior and Cost Estimation
jl jl jl jl
3. Cost-Volume-Profit Analysis and Pricing Decisions
jl jl jl jl jl
4. Product Costs and Job Order Costing
jl jl jl jl jl jl
5. Planning and Forecasting
jl jl jl
5A: Planning and Forecasting in a Retail Setting* (online only)
jl jl jl jl jl jl jl jl jl
6. Performance Evaluation: Variance Analysis
jl jl jl jl
7. Activity-Based Costing and Activity-Based Management
jl jl jl jl jl
8. Using Accounting Information to Make Managerial Decisions
jl jl jl jl jl jl jl
9. Capital Budgeting
jl jl
10. Decentralization and Performance Evaluation
jl jl jl jl
11. Performance Evaluation Revisited: A Balanced Approach
jl jl jl jl jl jl
12. Financial Statement Analysis
jl jl jl
13. Statement of Cash Flows
jl jl jl jl jl
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Chapter 1 jl
Accounting as a Tool for Management jl jl jl jl jl
CHAPTER LEARNING OBJECTIVES jl jl
1. Define managerial accounting (Unit 1.1) jl jl jl jl
There are several formal definitions of managerial accounting. A simple one is “thege
jl jl jl jl jl jl jl jl jl jl jl jl jl
neration of relevant information to support management’s decision- jl jl jl jl jl jl jl
making activities.” jl
2. Describe the differences between managerial and financial accounting(U jl jl jl jl jl jl jl jl
nit 1.1) jl
Managerial accounting’s primary users are managers and decision makers within an organi jl jl jl jl jl jl jl jl jl jl jl
zation, whereas financial accounting is aimed primarily at external users. Unlike GAAP that
jl jl jl jl jl jl jl jl jl jl jl jl jl
guides financial accounting, there are no mandated rules in managerial accounting. Manag
jl jl jl jl jl jl jl jl jl jl jl
erial accounting reports focus on operating segments, while financialaccounting statement
jl jl jl jl jl jl jl jl jl jl
s report results for the organization as a whole. Managerial accounting is concerned more w
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
ith projecting future results than reporting past results. Managerial information is prepare
jl jl jl jl jl jl jl jl jl jl jl
d to take advantage of a window of opportunity, evenif some accuracy must be sacrificed. Fi
jl jl jl jl jl jl jl jl jl jl jl jl jl jl jl jl
nancial accounting information is balanced to the penny and is delivered after the end of th
jl jl jl jl jl jl jl jl jl jl jl jl jl jl jl
e accounting period.
jl jl
3. List and describe the four functions of managers (Unit 1.1)
jl jl jl jl jl jl jl jl jl
Planning means setting a direction for the organization. Long- jl jl jl jl jl jl jl jl
term, or strategic planningprovides direction for a five- to ten-year period. Short-
jl jl jl jl jl jl jl jl jl jl jl jl
term or operational planning provides more detailed guidance for the coming year; it transl
jl jl jl jl jl jl jl jl jl jl jl jl jl
ates the company’s strategy into action steps. Controlling is the monitoring of day-to-
jl jl jl jl jl jl jl jl jl jl jl jl
day operations to identify any problems that require corrective action. Evaluating is the pro
jl jl jl jl jl jl jl jl jl jl jl jl jl
cess of comparing a particular period’s actual results to planned results, for the purpose of a
jl jl jl jl jl jl jl jl jl jl jl jl jl jl jl
ssessing managerial performance. Decision making means choosing between alternative c
jl jl jl jl jl jl jl jl jl
ourses of action. jl jl
4. Explain how the selection of a particular business strategy determines theinf jl jl jl jl jl jl jl jl jl jl jl
ormation that managers need to run an organization effectively (Unit 1.2) jl jl jl jl jl jl jl jl jl jl
To run a business effectively, managers need information that shows how well operatio
jl jl jl jl jl jl jl jl jl jl jl jl
ns are meeting the organization’s strategic goals. For instance, if the organization’s strat
jl jl jl jl jl jl jl jl jl jl jl jl
egy is to be a low- jl jl jl jl jl
cost producer, information about product costsand cost variances will be more useful t
jl jl jl jl jl jl jl jl jl jl jl jl jl
o managers than information about researchand development.
jl jl jl jl jl jl jl
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
5. Discuss the importance of ethical behavior in managerial accounting (Unit1.3
jl jl jl jl jl jl jl jl jl jl
)
Ethical behavior means knowing right from wrong and then doing the right thing. Manyco
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
mpanies and most professional organizations have codes of conduct to guide employees’
jl jl jl jl jl jl jl jl jl jl jl jl
actions. Acting unethically can lead to illegal activity and ultimately to the destruction of th
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
e firm. Furthermore, research has shown that a public commitment toethical behavior can
jl jl jl jl jl jl jl jl jl jl jl jl jl jl
lead to superior financial performance.
jl jl jl jl
