,Chapter 1—Introduction to Managerial Accounting
TRUE/FALSE
1. Management accounting information is only used by manufacturing organizations.
ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Business Applications | ACBSP-APC-25-
Managerial Characteristics/Terminology
2. The managerial activity of monitoring a plan's implementation and taking corrective action as needed
is referred to as decision making.
ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-
26-Management Functions
3. The process of choosing among competing alternatives is decision making.
ANS: T PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-26-
Management Functions
4. Managerial accounting information is not important for not-for-profit organizations.
ANS: F
Managerial accounting information is important for all types of organizations.
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
5. Managerial Accounting is designed primarily for internal users.
ANS: T PTS: 1 DIF: Easy OBJ: 1-1 | 1-2
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
6. Managerial accounting has its emphasis on the future.
ANS: T PTS: 1 DIF: Easy OBJ: 1-2
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
7. Financial accounting is governed by GAAP.
ANS: T PTS: 1 DIF: Easy OBJ: 1-2
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-02-GAAP
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, 8. The value chain is the set of activities required to design, develop, produce, market, and deliver
products and service to customers.
ANS: T PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
9. Time is not a crucial element in all phases of the value chain.
ANS: F PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
10. Activity-based costing is a less detailed approach to determining the cost of goods and services than
traditional cost accounting.
ANS: F
ABC costing is a more detailed approach to determining the cost of goods and services.
PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-27-
Managerial Accounting Features/Costs
11. Excellent customer service is an example of a value-added activity.
ANS: T PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Measurement | IMA-Cost Management | ACBSP-APC-27-
Managerial Accounting Features/Costs
12. A cost accountant would normally occupy a staff position within an organization.
ANS: T PTS: 1 DIF: Easy OBJ: 1-4
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
13. Positions that have direct responsibility for the basic objectives of an organization are referred to as
line positions.
ANS: T PTS: 1 DIF: Easy OBJ: 1-4
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
14. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
ANS: T PTS: 1 DIF: Easy OBJ: 1-5
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
15. 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.
ANS: F
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, The belief that each member of a group bears some responsibility for the well-being of other members
is a common principle underlying all ethical systems.
PTS: 1 DIF: Easy OBJ: 1-5
NAT: AACSB Ethics |AICPA BB-Resource Management | IMA-Business Applications | ACBSP-
APC-01-Purpose
16. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and
highlights that managerial accounting has more of an interdisciplinary flavor than other areas of
accounting.
ANS: T PTS: 1 DIF: Easy OBJ: 1-6
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
17. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification
for external auditors.
ANS: T PTS: 1 DIF: Easy OBJ: 1-6
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-01-Purpose
COMPLETION
1. The detailed formulation of action to achieve a particular end is the management activity
called_____________.
ANS: planning.
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Performance Measurement | ACBSP-
APC-26-Management Functions
2. ______________________________ is the provision of accounting information for a company’s
internal users.
ANS: Managerial accounting
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
3. The process of choosing among competing alternatives is called ________________________.
ANS: decision making
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Decision Analysis | ACBSP-APC-26-
Management Functions
4. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed
is referred to as ______________.
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
TRUE/FALSE
1. Management accounting information is only used by manufacturing organizations.
ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Business Applications | ACBSP-APC-25-
Managerial Characteristics/Terminology
2. The managerial activity of monitoring a plan's implementation and taking corrective action as needed
is referred to as decision making.
ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-
26-Management Functions
3. The process of choosing among competing alternatives is decision making.
ANS: T PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-26-
Management Functions
4. Managerial accounting information is not important for not-for-profit organizations.
ANS: F
Managerial accounting information is important for all types of organizations.
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
5. Managerial Accounting is designed primarily for internal users.
ANS: T PTS: 1 DIF: Easy OBJ: 1-1 | 1-2
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
6. Managerial accounting has its emphasis on the future.
ANS: T PTS: 1 DIF: Easy OBJ: 1-2
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
7. Financial accounting is governed by GAAP.
ANS: T PTS: 1 DIF: Easy OBJ: 1-2
NAT: AACSB Analytic | AICPA FN-Reporting | IMA-Cost Management | ACBSP-APC-02-GAAP
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, 8. The value chain is the set of activities required to design, develop, produce, market, and deliver
products and service to customers.
ANS: T PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
9. Time is not a crucial element in all phases of the value chain.
ANS: F PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
10. Activity-based costing is a less detailed approach to determining the cost of goods and services than
traditional cost accounting.
ANS: F
ABC costing is a more detailed approach to determining the cost of goods and services.
PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Cost Management | ACBSP-APC-27-
Managerial Accounting Features/Costs
11. Excellent customer service is an example of a value-added activity.
ANS: T PTS: 1 DIF: Easy OBJ: 1-3
NAT: AACSB Analytic | AICPA FN-Measurement | IMA-Cost Management | ACBSP-APC-27-
Managerial Accounting Features/Costs
12. A cost accountant would normally occupy a staff position within an organization.
ANS: T PTS: 1 DIF: Easy OBJ: 1-4
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
13. Positions that have direct responsibility for the basic objectives of an organization are referred to as
line positions.
ANS: T PTS: 1 DIF: Easy OBJ: 1-4
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
14. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
ANS: T PTS: 1 DIF: Easy OBJ: 1-5
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
15. 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.
ANS: F
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
, The belief that each member of a group bears some responsibility for the well-being of other members
is a common principle underlying all ethical systems.
PTS: 1 DIF: Easy OBJ: 1-5
NAT: AACSB Ethics |AICPA BB-Resource Management | IMA-Business Applications | ACBSP-
APC-01-Purpose
16. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and
highlights that managerial accounting has more of an interdisciplinary flavor than other areas of
accounting.
ANS: T PTS: 1 DIF: Easy OBJ: 1-6
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
17. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification
for external auditors.
ANS: T PTS: 1 DIF: Easy OBJ: 1-6
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-01-Purpose
COMPLETION
1. The detailed formulation of action to achieve a particular end is the management activity
called_____________.
ANS: planning.
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Performance Measurement | ACBSP-
APC-26-Management Functions
2. ______________________________ is the provision of accounting information for a company’s
internal users.
ANS: Managerial accounting
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA BB-Industry | IMA-Cost Management | ACBSP-APC-25-
Managerial Characteristics/Terminology
3. The process of choosing among competing alternatives is called ________________________.
ANS: decision making
PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Analytic | AICPA FN-Decision Modeling | IMA-Decision Analysis | ACBSP-APC-26-
Management Functions
4. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed
is referred to as ______________.
© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
