Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
True/FalsegQuestions
1. Althoughgfinancialgandgmanagerialgaccountinggdiffergingmanygways,gtheygaregsimilargingt
hatgbothgrelygongthegsamegunderlyinggfinancialgdata.
Answer:gTrueg g Level:gMediumg g LO:g1
2. Managerialgaccountinggisgagbranchgofgfinancialgaccountinggandgservesgessentiallygthegs
amegpurposesgasgfinancialgaccounting.
Answer:gFalseg g Level:gMediumg g LO:g1
3. Managerialgaccountinggplacesggreatergemphasisgongthegfuturegthangfinancialg
accounting,gwhichgisgprimarilygconcernedgwithgthegpast.
Answer:gTrueg g Level:gEasyg g LO:g1
4. Managerialgaccountinggisgnotgneededgingagnon-profitgorggovernmentalgorganization.
Answer:gFalseg g Level:gEasyg g LO:g1
5. Whengcarryinggoutgtheirgplanninggactivities,gmanagersgselectgagcoursegofgactiongandgs
pecifyghowgthegactiongwillgbegimplemented.
Answer:gTrueg g Level:gEasyg g LO:g2
6. Whengcarryinggoutgtheirgplanninggactivities,gmanagersgobtaingfeedbackgtogensuregthatgth
egplangisgactuallygcarriedgoutgandgisgappropriatelygmodifiedgasgcircumstancesgchange.
Answer:gFalseg g Level:gMediumg g LO:g2
7. Thegcontrollergoccupiesgaglinegpositiongingangorganization.
Answer:gFalseg g Level:gEasyg g LO:g2
8. Decentralizationgmeansgthegdelegationgofgdecision-
makinggauthoritygthroughoutgangorganizationgbygallowinggmanagersgatgvariousgoperati
ngglevelsgtogmakegkeygdecisionsgrelatinggtogtheirgowngareagofgresponsibility.
Answer:gTrueg g Level:gEasyg g LO:g2
Garrison,gManagerialgAccounting,g12thgEdition 3
,Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
9. Agfirm'sgorganizationgchartgwillgnormallygshowgbothgthegformalgandginformalglinesgofgr
eportinggandgcommunication.
Answer:gFalseg g Level:gEasyg g LO:g2
10. ThegChiefgFinancialgOfficergofgangorganizationgisgresponsiblegforgensuringgthatglinego
perationsgrungsmoothly.
Answer:gFalseg g Level:gMediumg g LO:g2
11. Traditionally,gcompaniesghavegmaintainedglargegamountsgofgrawgmaterials,gworkgingproc
ess,gandgfinishedggoodsginventoriesgtogactgasgbuffersgsogthatgoperationsgcangproceedgsmoo
thlygevengifgtheregaregunanticipatedgdisruptions.
Answer:gTrueg g Level:gMediumg g LO:g3
12. ProcessgReengineeringgisggenerallygconsideredgtogbegagmoregradicalgapproachgtogi
mprovementgthangTotalgQualitygManagement.
Answer:gTrueg g Level:gEasyg g LO:g3
13. ProcessgReengineeringgemphasizesgagteamgapproachginvolvinggfront-
linegworkers,gwhereasgTotalgQualitygManagementgisgusuallygimplementedgusinggoutsi
degspecialistsgandgisgimposedgfromgabove.
Answer:gFalseg g Level:gMediumg g LO:g3
14. Ifgethicalgstandardsgweregnotggenerallygfollowed,gonegofgthegresultsgwouldgprobablygbegf
ewerggoodsgandgservicesgavailablegingthegmarketplace.
Answer:gTrueg g Level:gMediumg g LO:g4
15. ThegStandardsgofgEthicalgConductgforgManagementgAccountantsgpromulgatedgbygthegI
nstitutegofgManagementgAccountantsgspecificallygstategthatgmanagementgaccountants'gs
olegethicalgresponsibilitygisgtognotgbreakganyglaws.
Answer:gFalseg g Level:gEasyg g LO:g4
4 Garrison,gManagerialgAccounting,g12thgEdition
,Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
MultiplegChoicegQuestions
16. Managementgaccountinggfocusesgprimarilygongprovidinggdatagfor:
A) internalgusesgbygmanagers.
B) externalgusesgbygstockholdersgandgcreditors.
C) externalgusesgbygthegInternalgRevenuegService.
D) externalgusesgbygthegSecuritiesgandgExchangegCommission.
Answer:gAg g Level:gEasyg g LO:g1
17. Managerialgaccounting:
A) isgmoregfuturegorientedgthangfinancialgaccounting.
B) tendsgtogsummarizeginformationgmoregthangfinancialgaccounting
C) isgprimarilygconcernedgwithgprovidingginformationgtogexternalgusers.
D) isgmoregconcernedgwithgprecisiongthangtimeliness.
Answer:gAg g Level:gEasyg g LO:g1
18. Comparedgtogfinancialgaccounting,gmanagerialgaccountinggplacesgmoregemphasisgon:
A) thegflexibilitygofginformation.
B) thegprecisiongofginformation.
C) thegtimelinessgofginformation.
D) bothgAgandgCgabove.
Answer:gDg g Level:gEasyg g LO:g1
19. Thegfunctiongofgmanagementgthatgcomparesgplannedgresultsgtogactualgresultsgisgknownga
s:
A) planning.
B) directinggandgmotivating.
C) controlling.
D) decisiongmaking.
Answer:gCg g Level:gEasyg g LO:g2
20. Whichgofgthegfunctionsgofgmanagementginvolvesgoverseeinggday-to-daygactivities?
A) Planning
B) Directinggandgmotivating
C) Controlling
D) Decisiongmaking
Answer:gBg g Level:gEasyg g LO:g2
Garrison,gManagerialgAccounting,g12thgEdition 5
, Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
21. Whichgofgthegfollowinggisgnotgonegofgthegthreegbasicgactivitiesgofgagmanager?
A) Planning
B) Controlling
C) Directinggandgmotivating
D) Compilinggmanagementgaccountinggreportsg
Answer:gDg Level:gEasyg LO:g2
22. Thegdelegationgofgdecisiongmakinggtoglowerglevelsgingangorganizationgisgknowngas:
A) thegplanninggandgcontrolgcycle.
B) controlling.
C) decentralization.
D) nonegofgthese.
Answer:gCg g Level:gEasyg g LO:g2
23. Whichgofgthegfollowinggstatementsgaregfalsegconcerningglinegandgstaffgfunctions?
I. Personsgoccupyinggstaffgfunctionsghavegauthoritygovergpersonsgoccupyingglinegf
unctions.
II. Bothglinegandgstaffgfunctionsgaregdepictedgongthegorganizationgchart.
III. Linegfunctionsgaregdirectlygrelatedgtogthegbasicgobjectivesgofgangorganization.
A) OnlygI
B) OnlygII
C) OnlygIgandgII
D) I,gII,gandgIII
Answer:gAg g Level:gMediumg g LO:g2
24. Whichgofgfollowinggwouldgnormallygbegfoundgongagmanufacturinggcompany'sg
organizationgchart?
A) theglayoutgofgthegfactorygassemblyglines
B) aglistgofgthegmaterialsgneededgtogproducegeachgofgthegcompany'sgproducts
C) theginformalglinesgofgreportinggandgcommunication
D) nonegofgthegabove
Answer:gDg g Level:gEasyg g LO:g2
6 Garrison,gManagerialgAccounting,g12thgEdition
g g g g g g g
True/FalsegQuestions
1. Althoughgfinancialgandgmanagerialgaccountinggdiffergingmanygways,gtheygaregsimilargingt
hatgbothgrelygongthegsamegunderlyinggfinancialgdata.
Answer:gTrueg g Level:gMediumg g LO:g1
2. Managerialgaccountinggisgagbranchgofgfinancialgaccountinggandgservesgessentiallygthegs
amegpurposesgasgfinancialgaccounting.
Answer:gFalseg g Level:gMediumg g LO:g1
3. Managerialgaccountinggplacesggreatergemphasisgongthegfuturegthangfinancialg
accounting,gwhichgisgprimarilygconcernedgwithgthegpast.
Answer:gTrueg g Level:gEasyg g LO:g1
4. Managerialgaccountinggisgnotgneededgingagnon-profitgorggovernmentalgorganization.
Answer:gFalseg g Level:gEasyg g LO:g1
5. Whengcarryinggoutgtheirgplanninggactivities,gmanagersgselectgagcoursegofgactiongandgs
pecifyghowgthegactiongwillgbegimplemented.
Answer:gTrueg g Level:gEasyg g LO:g2
6. Whengcarryinggoutgtheirgplanninggactivities,gmanagersgobtaingfeedbackgtogensuregthatgth
egplangisgactuallygcarriedgoutgandgisgappropriatelygmodifiedgasgcircumstancesgchange.
Answer:gFalseg g Level:gMediumg g LO:g2
7. Thegcontrollergoccupiesgaglinegpositiongingangorganization.
Answer:gFalseg g Level:gEasyg g LO:g2
8. Decentralizationgmeansgthegdelegationgofgdecision-
makinggauthoritygthroughoutgangorganizationgbygallowinggmanagersgatgvariousgoperati
ngglevelsgtogmakegkeygdecisionsgrelatinggtogtheirgowngareagofgresponsibility.
Answer:gTrueg g Level:gEasyg g LO:g2
Garrison,gManagerialgAccounting,g12thgEdition 3
,Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
9. Agfirm'sgorganizationgchartgwillgnormallygshowgbothgthegformalgandginformalglinesgofgr
eportinggandgcommunication.
Answer:gFalseg g Level:gEasyg g LO:g2
10. ThegChiefgFinancialgOfficergofgangorganizationgisgresponsiblegforgensuringgthatglinego
perationsgrungsmoothly.
Answer:gFalseg g Level:gMediumg g LO:g2
11. Traditionally,gcompaniesghavegmaintainedglargegamountsgofgrawgmaterials,gworkgingproc
ess,gandgfinishedggoodsginventoriesgtogactgasgbuffersgsogthatgoperationsgcangproceedgsmoo
thlygevengifgtheregaregunanticipatedgdisruptions.
Answer:gTrueg g Level:gMediumg g LO:g3
12. ProcessgReengineeringgisggenerallygconsideredgtogbegagmoregradicalgapproachgtogi
mprovementgthangTotalgQualitygManagement.
Answer:gTrueg g Level:gEasyg g LO:g3
13. ProcessgReengineeringgemphasizesgagteamgapproachginvolvinggfront-
linegworkers,gwhereasgTotalgQualitygManagementgisgusuallygimplementedgusinggoutsi
degspecialistsgandgisgimposedgfromgabove.
Answer:gFalseg g Level:gMediumg g LO:g3
14. Ifgethicalgstandardsgweregnotggenerallygfollowed,gonegofgthegresultsgwouldgprobablygbegf
ewerggoodsgandgservicesgavailablegingthegmarketplace.
Answer:gTrueg g Level:gMediumg g LO:g4
15. ThegStandardsgofgEthicalgConductgforgManagementgAccountantsgpromulgatedgbygthegI
nstitutegofgManagementgAccountantsgspecificallygstategthatgmanagementgaccountants'gs
olegethicalgresponsibilitygisgtognotgbreakganyglaws.
Answer:gFalseg g Level:gEasyg g LO:g4
4 Garrison,gManagerialgAccounting,g12thgEdition
,Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
MultiplegChoicegQuestions
16. Managementgaccountinggfocusesgprimarilygongprovidinggdatagfor:
A) internalgusesgbygmanagers.
B) externalgusesgbygstockholdersgandgcreditors.
C) externalgusesgbygthegInternalgRevenuegService.
D) externalgusesgbygthegSecuritiesgandgExchangegCommission.
Answer:gAg g Level:gEasyg g LO:g1
17. Managerialgaccounting:
A) isgmoregfuturegorientedgthangfinancialgaccounting.
B) tendsgtogsummarizeginformationgmoregthangfinancialgaccounting
C) isgprimarilygconcernedgwithgprovidingginformationgtogexternalgusers.
D) isgmoregconcernedgwithgprecisiongthangtimeliness.
Answer:gAg g Level:gEasyg g LO:g1
18. Comparedgtogfinancialgaccounting,gmanagerialgaccountinggplacesgmoregemphasisgon:
A) thegflexibilitygofginformation.
B) thegprecisiongofginformation.
C) thegtimelinessgofginformation.
D) bothgAgandgCgabove.
Answer:gDg g Level:gEasyg g LO:g1
19. Thegfunctiongofgmanagementgthatgcomparesgplannedgresultsgtogactualgresultsgisgknownga
s:
A) planning.
B) directinggandgmotivating.
C) controlling.
D) decisiongmaking.
Answer:gCg g Level:gEasyg g LO:g2
20. Whichgofgthegfunctionsgofgmanagementginvolvesgoverseeinggday-to-daygactivities?
A) Planning
B) Directinggandgmotivating
C) Controlling
D) Decisiongmaking
Answer:gBg g Level:gEasyg g LO:g2
Garrison,gManagerialgAccounting,g12thgEdition 5
, Chapter 1 Managerial Accounting and the Business Environment
g g g g g g g
21. Whichgofgthegfollowinggisgnotgonegofgthegthreegbasicgactivitiesgofgagmanager?
A) Planning
B) Controlling
C) Directinggandgmotivating
D) Compilinggmanagementgaccountinggreportsg
Answer:gDg Level:gEasyg LO:g2
22. Thegdelegationgofgdecisiongmakinggtoglowerglevelsgingangorganizationgisgknowngas:
A) thegplanninggandgcontrolgcycle.
B) controlling.
C) decentralization.
D) nonegofgthese.
Answer:gCg g Level:gEasyg g LO:g2
23. Whichgofgthegfollowinggstatementsgaregfalsegconcerningglinegandgstaffgfunctions?
I. Personsgoccupyinggstaffgfunctionsghavegauthoritygovergpersonsgoccupyingglinegf
unctions.
II. Bothglinegandgstaffgfunctionsgaregdepictedgongthegorganizationgchart.
III. Linegfunctionsgaregdirectlygrelatedgtogthegbasicgobjectivesgofgangorganization.
A) OnlygI
B) OnlygII
C) OnlygIgandgII
D) I,gII,gandgIII
Answer:gAg g Level:gMediumg g LO:g2
24. Whichgofgfollowinggwouldgnormallygbegfoundgongagmanufacturinggcompany'sg
organizationgchart?
A) theglayoutgofgthegfactorygassemblyglines
B) aglistgofgthegmaterialsgneededgtogproducegeachgofgthegcompany'sgproducts
C) theginformalglinesgofgreportinggandgcommunication
D) nonegofgthegabove
Answer:gDg g Level:gEasyg g LO:g2
6 Garrison,gManagerialgAccounting,g12thgEdition
