Chapter 1 Managerial Accounting and the Business Environmen
m m m m m m m
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True/FalsemQuestions
1. Althoughmfinancialmandmmanagerialmaccountingmdifferminmmanymways,mtheymaremsimilar
minm
thatmbothmrelymonmthemsamemunderlyingmfinancialmdata.
Answer:mTruem Level:mMediumm LO:m1
2. Managerialmaccountingmismambranchmofmfinancialmaccountingmandmservesmessentiallymt
hemsamempurposesmasmfinancialmaccounting.
Answer:mFalsem Level:mMediumm LO:m1
3. Managerialmaccountingmplacesmgreatermemphasismonmthemfuturemthanmfinanci
almaccounting,mwhichmismprimarilymconcernedmwithmthempast.
Answer:mTruem Level:mEasymmmLO:m1
4. Managerialmaccountingmismnotmneededminmamnon-profitmormgovernmentalmorganization.
Answer:mFalsemmLevel:mEasym LO:m1
5. Whenmcarryingmoutmtheirmplanningmactivities,mmanagersmselectmamcoursemofmactionma
ndmspecifymhowmthemactionmwillmbemimplemented.
Answer:mTruem Level:mEasymmmLO:m2
6. Whenmcarryingmoutmtheirmplanningmactivities,mmanagersmobtainmfeedbackmtomensuremtha
tmthemplanmismactuallymcarriedmoutmandmismappropriatelymmodifiedmasmcircumstancesmcha
nge.
Answer:mFalsem Level:mMediumm LO:m2
7. Themcontrollermoccupiesmamlinempositionminmanmorganization.
Answer:mFalsemmLevel:mEasym LO:m2
8. Decentralizationmmeansmthemdelegationmofmdecision-
makingmauthoritymthroughoutmanmorganizationmbymallowingmmanagersmatmvariousmoper
atingmlevelsmtommakemkeymdecisionsmrelatingmtomtheirmownmareamofmresponsibility.
Answer:mTruem Level:mEasymmmLO:m2
Garrison,mManagerialmAccounting,m12thmEditio 3
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9. Amfirm'smorganizationmchartmwillmnormallymshowmbothmthemformalmandminformalmlines
mofm
reportingmandmcommunication.
Answer:mFalsemmLevel:mEasym LO:m2
10. ThemChiefmFinancialmOfficermofmanmorganizationmismresponsiblemformensuringmthatmli
nemoperationsmrunmsmoothly.
Answer:mFalsem Level:mMediumm LO:m2
11. Traditionally,mcompaniesmhavemmaintainedmlargemamountsmofmrawmmaterials,mworkminmp
rocess,mandmfinishedmgoodsminventoriesmtomactmasmbuffersmsomthatmoperationsmcanmprocee
dmsmoothlymevenmifmtheremaremunanticipatedmdisruptions.
Answer:mTruem Level:mMediumm LO:m3
12. ProcessmReengineeringmismgenerallymconsideredmtombemammoremradicalmapproach
mtom
improvementmthanmTotalmQualitymManagement.
Answer:mTruem Level:mEasymmmLO:m3
13. ProcessmReengineeringmemphasizesmamteammapproachminvolvingmfront-
linemworkers,mwhereasmTotalmQualitymManagementmismusuallymimplementedmusingmou
tsidemspecialistsmandmismimposedmfrommabove.
Answer:mFalsem Level:mMediumm LO:m3
14. Ifmethicalmstandardsmweremnotmgenerallymfollowed,monemofmthemresultsmwouldmprobablym
bemfewermgoodsmandmservicesmavailableminmthemmarketplace.
Answer:mTruem Level:mMediumm LO:m4
15. ThemStandardsmofmEthicalmConductmformManagementmAccountantsmpromulgatedmbymth
emInstitutemofmManagementmAccountantsmspecificallymstatemthatmmanagementmaccounta
nts'msolemethicalmresponsibilitymismtomnotmbreakmanymlaws.
Answer:mFalsemmLevel:mEasym LO:m4
4 Garrison,mManagerialmAccounting,m12thmEditio
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,Chapter 1 Managerial Accounting and the Business Environmen
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MultiplemChoicemQuestions
16. Managementmaccountingmfocusesmprimarilymonmprovidingmdatamfor:
A) internalmusesmbymmanagers.
B) externalmusesmbymstockholdersmandmcreditors.
C) externalmusesmbymthemInternalmRevenuemService.
D) externalmusesmbymthemSecuritiesmandmExchangemCommission.
Answer:mAm Level:mEasym LO:m1
17. Managerialmaccounting:
A) ismmoremfuturemorientedmthanmfinancialmaccounting.
B) tendsmtomsummarizeminformationmmoremthanmfinancialmaccounting
C) ismprimarilymconcernedmwithmprovidingminformationmtomexternalmusers.
D) ismmoremconcernedmwithmprecisionmthanmtimeliness.
Answer:mAm Level:mEasym LO:m1
18. Comparedmtomfinancialmaccounting,mmanagerialmaccountingmplacesmmorememphasismon:
A) themflexibilitymofminformation.
B) themprecisionmofminformation.
C) themtimelinessmofminformation.
D) bothmAmandmCmabove.
Answer:mDm Level:mEasym LO:m1
19. Themfunctionmofmmanagementmthatmcomparesmplannedmresultsmtomactualmresultsmismkno
wnmas:
A) planning.
B) directingmandmmotivating.
C) controlling.
D) decisionmmaking.
Answer:mCm Level:mEasym LO:m2
20. Whichmofmthemfunctionsmofmmanagementminvolvesmoverseeingmday-to-daymactivities?
A) Planning
B) Directingmandmmotivating
C) Controlling
D) Decisionmmaking
Answer:mBm Level:mEasym LO:m2
Garrison,mManagerialmAccounting,m12thmEditio 5
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21. Whichmofmthemfollowingmismnotmonemofmthemthreembasicmactivitiesmofmammanager?
A) Planning
B) Controlling
C) Directingmandmmotivating
D) Compilingmmanagementmaccountingmreport
smAnswer:mDm Level:mEasym LO:m2
22. Themdelegationmofmdecisionmmakingmtomlowermlevelsminmanmorganizationmismknownmas:
A) themplanningmandmcontrolmcycle.
B) controlling.
C) decentralization.
D) nonemofmthese.
Answer:mCm Level:mEasym LO:m2
23. Whichmofmthemfollowingmstatementsmaremfalsemconcerningmlinemandmstaffmfunctions?
I. Personsmoccupyingmstaffmfunctionsmhavemauthoritymovermpersonsmoccupyingmli
nemfunctions.
II. Bothmlinemandmstaffmfunctionsmaremdepictedmonmthemorganizationmchart.
III. Linemfunctionsmaremdirectlymrelatedmtomthembasicmobjectivesmofmanmorganization.
A) OnlymI
B) OnlymII
C) OnlymImandmII
D) I,mII,mandmIII
Answer:mAm Level:mMediumm LO:m2
24. Whichmofmfollowingmwouldmnormallymbemfoundmonmammanufacturingmcompan
y'smorganizationmchart?
A) themlayoutmofmthemfactorymassemblymlines
B) amlistmofmthemmaterialsmneededmtomproducemeachmofmthemcompany'smproducts
C) theminformalmlinesmofmreportingmandmcommunication
D) nonemofmthemabove
Answer:mDm Level:mEasym LO:m2
6 Garrison,mManagerialmAccounting,m12thmEditio
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True/FalsemQuestions
1. Althoughmfinancialmandmmanagerialmaccountingmdifferminmmanymways,mtheymaremsimilar
minm
thatmbothmrelymonmthemsamemunderlyingmfinancialmdata.
Answer:mTruem Level:mMediumm LO:m1
2. Managerialmaccountingmismambranchmofmfinancialmaccountingmandmservesmessentiallymt
hemsamempurposesmasmfinancialmaccounting.
Answer:mFalsem Level:mMediumm LO:m1
3. Managerialmaccountingmplacesmgreatermemphasismonmthemfuturemthanmfinanci
almaccounting,mwhichmismprimarilymconcernedmwithmthempast.
Answer:mTruem Level:mEasymmmLO:m1
4. Managerialmaccountingmismnotmneededminmamnon-profitmormgovernmentalmorganization.
Answer:mFalsemmLevel:mEasym LO:m1
5. Whenmcarryingmoutmtheirmplanningmactivities,mmanagersmselectmamcoursemofmactionma
ndmspecifymhowmthemactionmwillmbemimplemented.
Answer:mTruem Level:mEasymmmLO:m2
6. Whenmcarryingmoutmtheirmplanningmactivities,mmanagersmobtainmfeedbackmtomensuremtha
tmthemplanmismactuallymcarriedmoutmandmismappropriatelymmodifiedmasmcircumstancesmcha
nge.
Answer:mFalsem Level:mMediumm LO:m2
7. Themcontrollermoccupiesmamlinempositionminmanmorganization.
Answer:mFalsemmLevel:mEasym LO:m2
8. Decentralizationmmeansmthemdelegationmofmdecision-
makingmauthoritymthroughoutmanmorganizationmbymallowingmmanagersmatmvariousmoper
atingmlevelsmtommakemkeymdecisionsmrelatingmtomtheirmownmareamofmresponsibility.
Answer:mTruem Level:mEasymmmLO:m2
Garrison,mManagerialmAccounting,m12thmEditio 3
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,Chapter 1 Managerial Accounting and the Business Environmen
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9. Amfirm'smorganizationmchartmwillmnormallymshowmbothmthemformalmandminformalmlines
mofm
reportingmandmcommunication.
Answer:mFalsemmLevel:mEasym LO:m2
10. ThemChiefmFinancialmOfficermofmanmorganizationmismresponsiblemformensuringmthatmli
nemoperationsmrunmsmoothly.
Answer:mFalsem Level:mMediumm LO:m2
11. Traditionally,mcompaniesmhavemmaintainedmlargemamountsmofmrawmmaterials,mworkminmp
rocess,mandmfinishedmgoodsminventoriesmtomactmasmbuffersmsomthatmoperationsmcanmprocee
dmsmoothlymevenmifmtheremaremunanticipatedmdisruptions.
Answer:mTruem Level:mMediumm LO:m3
12. ProcessmReengineeringmismgenerallymconsideredmtombemammoremradicalmapproach
mtom
improvementmthanmTotalmQualitymManagement.
Answer:mTruem Level:mEasymmmLO:m3
13. ProcessmReengineeringmemphasizesmamteammapproachminvolvingmfront-
linemworkers,mwhereasmTotalmQualitymManagementmismusuallymimplementedmusingmou
tsidemspecialistsmandmismimposedmfrommabove.
Answer:mFalsem Level:mMediumm LO:m3
14. Ifmethicalmstandardsmweremnotmgenerallymfollowed,monemofmthemresultsmwouldmprobablym
bemfewermgoodsmandmservicesmavailableminmthemmarketplace.
Answer:mTruem Level:mMediumm LO:m4
15. ThemStandardsmofmEthicalmConductmformManagementmAccountantsmpromulgatedmbymth
emInstitutemofmManagementmAccountantsmspecificallymstatemthatmmanagementmaccounta
nts'msolemethicalmresponsibilitymismtomnotmbreakmanymlaws.
Answer:mFalsemmLevel:mEasym LO:m4
4 Garrison,mManagerialmAccounting,m12thmEditio
n
,Chapter 1 Managerial Accounting and the Business Environmen
m m m m m m m
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MultiplemChoicemQuestions
16. Managementmaccountingmfocusesmprimarilymonmprovidingmdatamfor:
A) internalmusesmbymmanagers.
B) externalmusesmbymstockholdersmandmcreditors.
C) externalmusesmbymthemInternalmRevenuemService.
D) externalmusesmbymthemSecuritiesmandmExchangemCommission.
Answer:mAm Level:mEasym LO:m1
17. Managerialmaccounting:
A) ismmoremfuturemorientedmthanmfinancialmaccounting.
B) tendsmtomsummarizeminformationmmoremthanmfinancialmaccounting
C) ismprimarilymconcernedmwithmprovidingminformationmtomexternalmusers.
D) ismmoremconcernedmwithmprecisionmthanmtimeliness.
Answer:mAm Level:mEasym LO:m1
18. Comparedmtomfinancialmaccounting,mmanagerialmaccountingmplacesmmorememphasismon:
A) themflexibilitymofminformation.
B) themprecisionmofminformation.
C) themtimelinessmofminformation.
D) bothmAmandmCmabove.
Answer:mDm Level:mEasym LO:m1
19. Themfunctionmofmmanagementmthatmcomparesmplannedmresultsmtomactualmresultsmismkno
wnmas:
A) planning.
B) directingmandmmotivating.
C) controlling.
D) decisionmmaking.
Answer:mCm Level:mEasym LO:m2
20. Whichmofmthemfunctionsmofmmanagementminvolvesmoverseeingmday-to-daymactivities?
A) Planning
B) Directingmandmmotivating
C) Controlling
D) Decisionmmaking
Answer:mBm Level:mEasym LO:m2
Garrison,mManagerialmAccounting,m12thmEditio 5
n
, Chapter 1 Managerial Accounting and the Business Environmen
m m m m m m m
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21. Whichmofmthemfollowingmismnotmonemofmthemthreembasicmactivitiesmofmammanager?
A) Planning
B) Controlling
C) Directingmandmmotivating
D) Compilingmmanagementmaccountingmreport
smAnswer:mDm Level:mEasym LO:m2
22. Themdelegationmofmdecisionmmakingmtomlowermlevelsminmanmorganizationmismknownmas:
A) themplanningmandmcontrolmcycle.
B) controlling.
C) decentralization.
D) nonemofmthese.
Answer:mCm Level:mEasym LO:m2
23. Whichmofmthemfollowingmstatementsmaremfalsemconcerningmlinemandmstaffmfunctions?
I. Personsmoccupyingmstaffmfunctionsmhavemauthoritymovermpersonsmoccupyingmli
nemfunctions.
II. Bothmlinemandmstaffmfunctionsmaremdepictedmonmthemorganizationmchart.
III. Linemfunctionsmaremdirectlymrelatedmtomthembasicmobjectivesmofmanmorganization.
A) OnlymI
B) OnlymII
C) OnlymImandmII
D) I,mII,mandmIII
Answer:mAm Level:mMediumm LO:m2
24. Whichmofmfollowingmwouldmnormallymbemfoundmonmammanufacturingmcompan
y'smorganizationmchart?
A) themlayoutmofmthemfactorymassemblymlines
B) amlistmofmthemmaterialsmneededmtomproducemeachmofmthemcompany'smproducts
C) theminformalmlinesmofmreportingmandmcommunication
D) nonemofmthemabove
Answer:mDm Level:mEasym LO:m2
6 Garrison,mManagerialmAccounting,m12thmEditio
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