Name: Class: Date:
Test Bank For
Managerial Accounting The Cornerstone of Business Decision-Making 9th Edition Maryanne Mowen (Author),
Don Hansen, Dan Heitger
Chapter 1-15 Answers are at the End of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. Time is not a crucial element in all phases of the value chain.
a. True
b. False
2. Managerial accounting is designed primarily for internal users.
a. True
b. False
3. The process of choosing among competing alternatives is called decision making.
a. True
b. False
4. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
a. True
b. False
5. A cost accountant would normally occupy a staff position within an organization.
a. True
b. False
6. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external
auditors.
a. True
b. False
7. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and highlight that
managerial accounting has more of an interdisciplinary flavor than other areas of accounting.
a. True
b. False
8. The belief that each member of a group bears no responsibility for the well-being of other members is a common
principle underlying all ethical systems.
a. True
b. False
9. Positions that have direct responsibility for the basic objectives of an organization are referred to as line positions.
a. True
Page 1
,Name: Class: Date:
b. False
10. Excellent customer service is an example of a value-added activity.
a. True
b. False
11. GAAP governs financial accounting.
a. True
b. False
12. Management accounting information is used only by manufacturing organizations.
a. True
b. False
13. Managerial accounting information is not important for not-for-profit organizations.
a. True
b. False
14. The value chain is the set of activities required to design, develop, produce, market, and deliver products and services
to customers.
a. True
b. False
15. Managerial accounting emphasizes the future.
a. True
b. False
16. The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as
decision making.
a. True
b. False
17. Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional cost
accounting.
a. True
b. False
18. Amelia compared the budgeted spending on labor and materials used in production to the actual spending on labor and
materials used in production. Labor spending was higher than expected. Amelia emailed Robbie to discuss this outcome.
This is a managerial accounting-oriented issue.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
19. Investigating production variances and adjusting the production process are examples of:
a. planning.
Page 2
,Name: Class: Date:
b. controlling.
c. decision making.
d. All of these are correct.
20. Activity-based costing:
a. strives to create an environment that will enable workers to manufacture zero-defect products.
b. is the process of choosing among competing alternatives.
c. was established in response to financial scandals.
d. emphasizes the cost of tasks required to produce a product or offer a service.
21. Managerial accounting reports are prepared:
a. to provide creditors with information useful in making credit decisions.
b. to meet the needs of decision makers within a firm.
c. to present historical information.
d. All of these are correct.
22. Which of the following statements is true of managerial accounting?
a. Managerial accounting is the provision of accounting information for a company’s external users.
b. Managerial accounting attempts to provide information for controlling the organization’s actions.
c. Managerial accounting provides historical information.
d. Managerial accounting is subject to rules for external financial reporting.
23. The controller of an organization participates in:
a. planning.
b. controlling.
c. decision making.
d. All of these are correct
24. Which of the following would occupy a line position in a hospital?
a. Cafeteria manager
b. Hospital administrator
c. Chief of surgery
d. None of these are correct.
25. Which of the following statements is true of total quality management?
a. It is a management philosophy in which manufacturers strive to create an environment that will enable
workers to manufacture zero-defect products.
b. It has replaced the acceptable quality attitudes of the past.
c. It emphasizes the elimination of waste.
d. All of these are correct.
26. Which of the following areas is not emphasized by the Certified Management Accountant (CMA) examination?
a. External auditing and internal control
b. Management reporting, analysis, and behavioral issues
c. Decision analysis and information systems
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, Name: Class: Date:
d. Economics, finance, and management
27. Which of the following would normally hold a line position?
a. Staff accountant
b. Purchasing manager
c. General manager
d. Cost accountant
28. Which of the following statements is true of financial accounting?
a. Financial accounting is directed toward external users.
b. Financial accounting is subject to externally imposed rules.
c. Financial accounting provides information that can be objectively verified and audited.
d. All of these are correct.
29. Which of the following statements is true of profit maximization?
a. Profit maximization is achieved by considering the financial measures focused only on efficiency.
b. Profit maximization is an objective of financial accounting but not managerial accounting.
c. Profit maximization should be achieved through legal and ethical means.
d. Profit maximization results in maximum cost to and maximum production by a company.
30. Managerial accounting, as opposed to financial accounting, is primarily concerned with
a. the financial condition of the organization as a whole.
b. providing information for investors and creditors.
c. emphasizing the future.
d. meeting the requirements of generally accepted accounting principles.
31. Accountants that have a Certificate in Public Accounting (CPA):
a. are the only accountants permitted to serve as external auditors.
b. must pass a national examination and be licensed by the state in which they practice.
c. are responsible for assuring the reliability of a firm's financial statements.
d. All of these are correct.
32. Which of the following items would not be an example of a value-added activity?
a. Timely delivery of products
b. Customers being offered a variety of products
c. Storage of finished products
d. Excellent customer service
33. Which of the following items is an example of the management activity referred to as planning?
a. Developing a strategy for disposing of hazardous waste
b. Tracking the cost of employee absence
c. Ensuring that the most competent candidates are recruited by a company
d. All of these are correct.
34. In the United States, individuals who provide assurance service are designated as:
Page 4
Test Bank For
Managerial Accounting The Cornerstone of Business Decision-Making 9th Edition Maryanne Mowen (Author),
Don Hansen, Dan Heitger
Chapter 1-15 Answers are at the End of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. Time is not a crucial element in all phases of the value chain.
a. True
b. False
2. Managerial accounting is designed primarily for internal users.
a. True
b. False
3. The process of choosing among competing alternatives is called decision making.
a. True
b. False
4. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
a. True
b. False
5. A cost accountant would normally occupy a staff position within an organization.
a. True
b. False
6. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external
auditors.
a. True
b. False
7. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and highlight that
managerial accounting has more of an interdisciplinary flavor than other areas of accounting.
a. True
b. False
8. The belief that each member of a group bears no responsibility for the well-being of other members is a common
principle underlying all ethical systems.
a. True
b. False
9. Positions that have direct responsibility for the basic objectives of an organization are referred to as line positions.
a. True
Page 1
,Name: Class: Date:
b. False
10. Excellent customer service is an example of a value-added activity.
a. True
b. False
11. GAAP governs financial accounting.
a. True
b. False
12. Management accounting information is used only by manufacturing organizations.
a. True
b. False
13. Managerial accounting information is not important for not-for-profit organizations.
a. True
b. False
14. The value chain is the set of activities required to design, develop, produce, market, and deliver products and services
to customers.
a. True
b. False
15. Managerial accounting emphasizes the future.
a. True
b. False
16. The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as
decision making.
a. True
b. False
17. Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional cost
accounting.
a. True
b. False
18. Amelia compared the budgeted spending on labor and materials used in production to the actual spending on labor and
materials used in production. Labor spending was higher than expected. Amelia emailed Robbie to discuss this outcome.
This is a managerial accounting-oriented issue.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
19. Investigating production variances and adjusting the production process are examples of:
a. planning.
Page 2
,Name: Class: Date:
b. controlling.
c. decision making.
d. All of these are correct.
20. Activity-based costing:
a. strives to create an environment that will enable workers to manufacture zero-defect products.
b. is the process of choosing among competing alternatives.
c. was established in response to financial scandals.
d. emphasizes the cost of tasks required to produce a product or offer a service.
21. Managerial accounting reports are prepared:
a. to provide creditors with information useful in making credit decisions.
b. to meet the needs of decision makers within a firm.
c. to present historical information.
d. All of these are correct.
22. Which of the following statements is true of managerial accounting?
a. Managerial accounting is the provision of accounting information for a company’s external users.
b. Managerial accounting attempts to provide information for controlling the organization’s actions.
c. Managerial accounting provides historical information.
d. Managerial accounting is subject to rules for external financial reporting.
23. The controller of an organization participates in:
a. planning.
b. controlling.
c. decision making.
d. All of these are correct
24. Which of the following would occupy a line position in a hospital?
a. Cafeteria manager
b. Hospital administrator
c. Chief of surgery
d. None of these are correct.
25. Which of the following statements is true of total quality management?
a. It is a management philosophy in which manufacturers strive to create an environment that will enable
workers to manufacture zero-defect products.
b. It has replaced the acceptable quality attitudes of the past.
c. It emphasizes the elimination of waste.
d. All of these are correct.
26. Which of the following areas is not emphasized by the Certified Management Accountant (CMA) examination?
a. External auditing and internal control
b. Management reporting, analysis, and behavioral issues
c. Decision analysis and information systems
Page 3
, Name: Class: Date:
d. Economics, finance, and management
27. Which of the following would normally hold a line position?
a. Staff accountant
b. Purchasing manager
c. General manager
d. Cost accountant
28. Which of the following statements is true of financial accounting?
a. Financial accounting is directed toward external users.
b. Financial accounting is subject to externally imposed rules.
c. Financial accounting provides information that can be objectively verified and audited.
d. All of these are correct.
29. Which of the following statements is true of profit maximization?
a. Profit maximization is achieved by considering the financial measures focused only on efficiency.
b. Profit maximization is an objective of financial accounting but not managerial accounting.
c. Profit maximization should be achieved through legal and ethical means.
d. Profit maximization results in maximum cost to and maximum production by a company.
30. Managerial accounting, as opposed to financial accounting, is primarily concerned with
a. the financial condition of the organization as a whole.
b. providing information for investors and creditors.
c. emphasizing the future.
d. meeting the requirements of generally accepted accounting principles.
31. Accountants that have a Certificate in Public Accounting (CPA):
a. are the only accountants permitted to serve as external auditors.
b. must pass a national examination and be licensed by the state in which they practice.
c. are responsible for assuring the reliability of a firm's financial statements.
d. All of these are correct.
32. Which of the following items would not be an example of a value-added activity?
a. Timely delivery of products
b. Customers being offered a variety of products
c. Storage of finished products
d. Excellent customer service
33. Which of the following items is an example of the management activity referred to as planning?
a. Developing a strategy for disposing of hazardous waste
b. Tracking the cost of employee absence
c. Ensuring that the most competent candidates are recruited by a company
d. All of these are correct.
34. In the United States, individuals who provide assurance service are designated as:
Page 4
