Chapter 1: The role of accounting information in management decision
making
True/false questions
1. A vision statement is a theoretical description of what an organisation should become.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
2. An organisational vision is a short-term plan for maximising financial results.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
3. Most organisations have one stakeholder.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
4. Organisational core competencies unrelated to the organisational vision.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
1.2
,5. Organisational strategies are the tactics that managers use to take advantage of core
competencies while working towards the organisational vision.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
6. Most organisations have databases that contain information collected formally or
informally from internal sources only.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
7. Desirable employee behaviour can be motivated by tying employee performance
evaluation and pay to long-term or short-term results.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
8. Organisational information systems only collect accounting information.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.3
,9. Cost accounting information is used for both management accounting and financial
accounting activities.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
10. Management accounting is the process of gathering, summarising and reporting
financial and non-financial information used internally to make decisions.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
11. Intellectual capital is a type of financial resource that is captured by the organisation’s
information system.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
12. It is easy to differentiate between internal and external reports.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.4
, 13. The design of the management accounting system structure is influenced by both
external and internal factors.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
14. Technological advances have allowed management accountants to develop previously
infeasible cost and management accounting systems.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
15. GAAP stands for generally agreed accounting practices.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
16. Only large established organisations require a management accounting function.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.5
making
True/false questions
1. A vision statement is a theoretical description of what an organisation should become.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
2. An organisational vision is a short-term plan for maximising financial results.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
3. Most organisations have one stakeholder.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
4. Organisational core competencies unrelated to the organisational vision.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
1.2
,5. Organisational strategies are the tactics that managers use to take advantage of core
competencies while working towards the organisational vision.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
6. Most organisations have databases that contain information collected formally or
informally from internal sources only.
a. True
*b. False
Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
7. Desirable employee behaviour can be motivated by tying employee performance
evaluation and pay to long-term or short-term results.
*a. True
b. False
Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an
organisation
8. Organisational information systems only collect accounting information.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.3
,9. Cost accounting information is used for both management accounting and financial
accounting activities.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
10. Management accounting is the process of gathering, summarising and reporting
financial and non-financial information used internally to make decisions.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
11. Intellectual capital is a type of financial resource that is captured by the organisation’s
information system.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
12. It is easy to differentiate between internal and external reports.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.4
, 13. The design of the management accounting system structure is influenced by both
external and internal factors.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
14. Technological advances have allowed management accountants to develop previously
infeasible cost and management accounting systems.
*a. True
b. False
Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
15. GAAP stands for generally agreed accounting practices.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
16. Only large established organisations require a management accounting function.
a. True
*b. False
Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information
in management decision making
1.5
