Test Bank for Garrison, Managerial Accounting, 12th Edition Latest Verified Review 2024 Practice Questions and Answers for Exam Preparation, 100% Correct with Explanations, Highly Recommended, Download to Score A+

Garrison, Managerial Accounting, 12th
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Edition

,Chapter 1 Managerial Accounting and the Business Environment
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True/False Questions
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1. Although financial and managerial accounting differ in many ways, they are similar
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in that both rely on the same underlying financial data.
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Answer: True ss s s ss Level: Medium ss ss ss LO: 1 ss




2. Managerial accounting is a branch of financial accounting and serves essentially
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the same purposes as financial accounting.
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Answer: False ss ss ss Level: Medium ss ss ss LO: 1 ss




3. Managerial accounting places greater emphasis on the future than
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financial accounting, which is primarily concerned with the past.
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Answer: True ss s s ss Level: Easy ss ss ss LO: 1 ss




4. Managerial accounting is not needed in a non-profit or governmental organization.
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Answer: False ss ss ss Level: Easy ss ss ss LO: 1 ss




5. When carrying out their planning activities, managers select a course of action
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and specify how the action will be implemented.
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Answer: True ss s s ss Level: Easy ss ss ss LO: 2 ss




6. When carrying out their planning activities, managers obtain feedback to ensure
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that the plan is actually carried out and is appropriately modified as circumstances
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change.
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Answer: False ss ss ss Level: Medium ss ss ss LO: 2 ss




7. The controller occupies a line position in an organization.
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Answer: False ss ss ss Level: Easy ss ss ss LO: 2 ss




8. Decentralization means the delegation of decision-making authority throughout an
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organization by allowing managers at various operating levels to make key
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decisions relating to their own area of responsibility.
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Answer: True ss s s ss Level: Easy ss ss ss LO: 2 ss




4 Garrison, Managerial Accounting, 12th
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Edition

, 9. A firm's organization chart will normally show both the formal and informal lines
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of reporting and communication.
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Answer: False ss ss ss Level: Easy ss ss ss LO: 2 ss




10. The Chief Financial Officer of an organization is responsible for ensuring that
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line operations run smoothly.
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Answer: False ss ss ss Level: Medium ss ss ss LO: 2 ss




11. Traditionally, companies have maintained large amounts of raw materials, work in
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process, and finished goods inventories to act as buffers so that operations can
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proceed smoothly even if there are unanticipated disruptions.
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Answer: True ss s s ss Level: Medium ss ss ss LO: 3 ss




12. Process Reengineering is generally considered to be a more radical approach
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to improvement than Total Quality Management.
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Answer: True ss s s ss Level: Easy ss ss ss LO: 3 ss




13. Process Reengineering emphasizes a team approach involving front-line workers,
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whereas Total Quality Management is usually implemented using outside
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specialists and is imposed from above.
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Answer: False ss ss ss Level: Medium ss ss ss LO: 3 ss




14. If ethical standards were not generally followed, one of the results would probably
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be fewer goods and services available in the marketplace.
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Answer: True ss s s ss Level: Medium ss ss ss LO: 4 ss




15. The Standards of Ethical Conduct for Management Accountants promulgated by
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the Institute of Management Accountants specifically state that management
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accountants' sole ethical responsibility is to not break any laws.
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Answer: False ss ss ss Level: Easy ss ss ss LO: 4 ss




Garrison, Managerial Accounting, 12th
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Edition

, Chapter 1 Managerial Accounting and the Business Environment
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Multiple Choice Questions
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16. Management accounting focuses primarily on providing data for: ss ss ss ss ss ss ss


A) internal uses by managers. ss ss ss


B) external uses by stockholders and creditors. ss ss ss ss ss


C) external uses by the Internal Revenue Service. ss ss ss ss ss ss


D) external uses by the Securities and Exchange Commission.
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Answer: A ss ss ss Level: Easy ss ss ss LO: 1 ss




17. Managerial accounting: ss


A) is more future oriented than financial accounting.
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B) tends to summarize information more than financial accounting
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C) is primarily concerned with providing information to external users.
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D) is more concerned with precision than timeliness.
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Answer: A ss ss ss Level: Easy ss ss ss LO: 1 ss




18. Compared to financial accounting, managerial accounting places more emphasis on:
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A) the flexibility of information.
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B) the precision of information.
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C) the timeliness of information.
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D) both A and C above. ss ss ss ss




Answer: D ss ss ss Level: Easy ss ss ss LO: 1 ss




19. The function of management that compares planned results to actual results is
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known as:
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A) planning.
B) directing and motivating. ss ss


C) controlling.
D) decision making. ss




Answer: C ss ss ss Level: Easy ss ss ss LO: 2 ss




20. Which of the functions of management involves overseeing day-to-day activities?
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A) Planning
B) Directing and motivating ss ss


C) Controlling
D) Decision making ss




Answer: B ss ss ss Level: Easy ss ss ss LO: 2 ss




6 Garrison, Managerial Accounting, 12th
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Edition