Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
True/False Questions
1. Although financial and managerial accounting differ in many ways, they are similar in
that both rely on the same underlying financial data.
Answer: True Level: Medium LO: 1
2. Managerial accounting is a branch of financial accounting and serves essentially the
same purposes as financial accounting.
Answer: False Level: Medium LO: 1
3. Managerial accounting places greater emphasis on the future than financial
accounting, which is primarily concerned with the past.
Answer: True Level: Easy LO: 1
4. Managerial accounting is not needed in a non-profit or governmental organization.
Answer: False Level: Easy LO: 1
5. When carrying out their planning activities, managers select a course of action and
specify how the action will be implemented.
Answer: True Level: Easy LO: 2
6. When carrying out their planning activities, managers obtain feedback to ensure that
the plan is actually carried out and is appropriately modified as circumstances change.
Answer: False Level: Medium LO: 2
7. The controller occupies a line position in an organization.
Answer: False Level: Easy LO: 2
8. Decentralization means the delegation of decision-making authority throughout an
organization by allowing managers at various operating levels to make key decisions
relating to their own area of responsibility.
Answer: True Level: Easy LO: 2
Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition 3
SCHOLARVAULT
,Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
9. A #dsfirm's #dsorganization #dschart #dswill #dsnormally #dsshow #dsboth #dsthe #dsformal #dsand
#dsinformal #dslines #dsof #dsreporting #dsand #dscommunication.
Answer: #dsFalse # d s #ds Level: #dsEasy # d s #ds LO: #ds2
10. The #dsChief #dsFinancial #dsOfficer #dsof #dsan #dsorganization #dsis #dsresponsible #dsfor
#dsensuring #dsthat #dsline #dsoperations #dsrun #dssmoothly.
Answer: #dsFalse # d s #ds Level: #dsMedium # d s #ds LO: #ds2
11. Traditionally, #dscompanies #dshave #dsmaintained #dslarge #dsamounts #dsof #dsraw #dsmaterials,
#dswork #dsin #dsprocess, #dsand #dsfinished #dsgoods #dsinventories #dsto #dsact #dsas #dsbuffers #dsso #dsthat
#dsoperations #dscan #dsproceed #dssmoothly #dseven #dsif #dsthere #dsare #dsunanticipated
#dsdisruptions.
Answer: #dsTrue # d s #ds Level: #dsMedium # d s #ds LO: #ds3
12. Process #dsReengineering #dsis #dsgenerally #dsconsidered #dsto #dsbe #dsa #dsmore #dsradical
#dsapproach #dsto #dsimprovement #dsthan #dsTotal #dsQuality #dsManagement.
Answer: #dsTrue # d s #ds Level: #dsEasy # d s #ds LO: #ds3
13. Process #dsReengineering #dsemphasizes #dsa #dsteam #dsapproach #dsinvolving #dsfront-line
#dsworkers, #dswhereas #dsTotal #dsQuality #dsManagement #dsis #dsusually #dsimplemented #dsusing
#dsoutside #dsspecialists #dsand #dsis #dsimposed #dsfrom #dsabove.
Answer: #dsFalse # d s #ds Level: #dsMedium # d s #ds LO: #ds3
14. If #dsethical #dsstandards #dswere #dsnot #dsgenerally #dsfollowed, #dsone #dsof #dsthe #dsresults #dswould
#dsprobably #dsbe #dsfewer #dsgoods #dsand #dsservices #dsavailable #dsin #dsthe #dsmarketplace.
Answer: #dsTrue # d s #ds Level: #dsMedium # d s #ds LO: #ds4
15. The #dsStandards #dsof #dsEthical #dsConduct #dsfor #dsManagement #dsAccountants
#dspromulgated #dsby #dsthe #dsInstitute #dsof #dsManagement #dsAccountants #dsspecifically #dsstate
#dsthat #dsmanagement #dsaccountants' #dssole #dsethical #dsresponsibility #dsis #dsto #dsnot #dsbreak
#dsany #dslaws.
Answer: #dsFalse # d s #ds Level: #dsEasy # d s #ds LO: #ds4
SCHOLARVAULT
,Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
4 Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition
SCHOLARVAULT
, Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
Multiple #dsChoice #dsQuestions
16. Management #dsaccounting #dsfocuses #dsprimarily #dson #dsproviding #dsdata #dsfor:
A) internal #dsuses #dsby #dsmanagers.
B) external #dsuses #dsby #dsstockholders #dsand #dscreditors.
C) external #dsuses #dsby #dsthe #dsInternal #dsRevenue #dsService.
D) external #dsuses #dsby #dsthe #dsSecurities #dsand #dsExchange #dsCommission.
Answer: #dsA # d s #ds Level: #dsEasy # d s #ds LO: #ds1
17. Managerial #dsaccounting:
A) is #dsmore #dsfuture #dsoriented #dsthan #dsfinancial #dsaccounting.
B) tends #dsto #dssummarize #dsinformation #dsmore #dsthan #dsfinancial #dsaccounting
C) is #dsprimarily #dsconcerned #dswith #dsproviding #dsinformation #dsto #dsexternal #dsusers.
D) is #dsmore #dsconcerned #dswith #dsprecision #dsthan #dstimeliness.
Answer: #dsA # d s #ds Level: #dsEasy # d s #ds LO: #ds1
18. Compared #dsto #dsfinancial #dsaccounting, #dsmanagerial #dsaccounting #dsplaces #dsmore #dsemphasis #dson:
A) the #dsflexibility #dsof #dsinformation.
B) the #dsprecision #dsof #dsinformation.
C) the #dstimeliness #dsof #dsinformation.
D) both #dsA #dsand #dsC #dsabove.
Answer: #dsD # d s #ds Level: #dsEasy # d s #ds LO: #ds1
19. The #dsfunction #dsof #dsmanagement #dsthat #dscompares #dsplanned #dsresults #dsto #dsactual #dsresults
#dsis #dsknown #dsas:
A) planning.
B) directing #dsand #dsmotivating.
C) controlling.
D) decision #dsmaking.
Answer: #dsC # d s #ds Level: #dsEasy # d s #ds LO: #ds2
20. Which #dsof #dsthe #dsfunctions #dsof #dsmanagement #dsinvolves #dsoverseeing #dsday-to-day #dsactivities?
A) Planning
B) Directing #dsand #dsmotivating
C) Controlling
D) Decision #dsmaking
Answer: #dsB # d s #ds Level: #dsEasy # d s #ds LO: #ds2
Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition 5
SCHOLARVAULT
#ds # d s #ds #ds #ds #ds
Environment
#ds
True/False Questions
1. Although financial and managerial accounting differ in many ways, they are similar in
that both rely on the same underlying financial data.
Answer: True Level: Medium LO: 1
2. Managerial accounting is a branch of financial accounting and serves essentially the
same purposes as financial accounting.
Answer: False Level: Medium LO: 1
3. Managerial accounting places greater emphasis on the future than financial
accounting, which is primarily concerned with the past.
Answer: True Level: Easy LO: 1
4. Managerial accounting is not needed in a non-profit or governmental organization.
Answer: False Level: Easy LO: 1
5. When carrying out their planning activities, managers select a course of action and
specify how the action will be implemented.
Answer: True Level: Easy LO: 2
6. When carrying out their planning activities, managers obtain feedback to ensure that
the plan is actually carried out and is appropriately modified as circumstances change.
Answer: False Level: Medium LO: 2
7. The controller occupies a line position in an organization.
Answer: False Level: Easy LO: 2
8. Decentralization means the delegation of decision-making authority throughout an
organization by allowing managers at various operating levels to make key decisions
relating to their own area of responsibility.
Answer: True Level: Easy LO: 2
Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition 3
SCHOLARVAULT
,Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
9. A #dsfirm's #dsorganization #dschart #dswill #dsnormally #dsshow #dsboth #dsthe #dsformal #dsand
#dsinformal #dslines #dsof #dsreporting #dsand #dscommunication.
Answer: #dsFalse # d s #ds Level: #dsEasy # d s #ds LO: #ds2
10. The #dsChief #dsFinancial #dsOfficer #dsof #dsan #dsorganization #dsis #dsresponsible #dsfor
#dsensuring #dsthat #dsline #dsoperations #dsrun #dssmoothly.
Answer: #dsFalse # d s #ds Level: #dsMedium # d s #ds LO: #ds2
11. Traditionally, #dscompanies #dshave #dsmaintained #dslarge #dsamounts #dsof #dsraw #dsmaterials,
#dswork #dsin #dsprocess, #dsand #dsfinished #dsgoods #dsinventories #dsto #dsact #dsas #dsbuffers #dsso #dsthat
#dsoperations #dscan #dsproceed #dssmoothly #dseven #dsif #dsthere #dsare #dsunanticipated
#dsdisruptions.
Answer: #dsTrue # d s #ds Level: #dsMedium # d s #ds LO: #ds3
12. Process #dsReengineering #dsis #dsgenerally #dsconsidered #dsto #dsbe #dsa #dsmore #dsradical
#dsapproach #dsto #dsimprovement #dsthan #dsTotal #dsQuality #dsManagement.
Answer: #dsTrue # d s #ds Level: #dsEasy # d s #ds LO: #ds3
13. Process #dsReengineering #dsemphasizes #dsa #dsteam #dsapproach #dsinvolving #dsfront-line
#dsworkers, #dswhereas #dsTotal #dsQuality #dsManagement #dsis #dsusually #dsimplemented #dsusing
#dsoutside #dsspecialists #dsand #dsis #dsimposed #dsfrom #dsabove.
Answer: #dsFalse # d s #ds Level: #dsMedium # d s #ds LO: #ds3
14. If #dsethical #dsstandards #dswere #dsnot #dsgenerally #dsfollowed, #dsone #dsof #dsthe #dsresults #dswould
#dsprobably #dsbe #dsfewer #dsgoods #dsand #dsservices #dsavailable #dsin #dsthe #dsmarketplace.
Answer: #dsTrue # d s #ds Level: #dsMedium # d s #ds LO: #ds4
15. The #dsStandards #dsof #dsEthical #dsConduct #dsfor #dsManagement #dsAccountants
#dspromulgated #dsby #dsthe #dsInstitute #dsof #dsManagement #dsAccountants #dsspecifically #dsstate
#dsthat #dsmanagement #dsaccountants' #dssole #dsethical #dsresponsibility #dsis #dsto #dsnot #dsbreak
#dsany #dslaws.
Answer: #dsFalse # d s #ds Level: #dsEasy # d s #ds LO: #ds4
SCHOLARVAULT
,Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
4 Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition
SCHOLARVAULT
, Chapter 1 Managerial Accounting and the Business
#ds # d s #ds #ds #ds #ds
Environment
#ds
Multiple #dsChoice #dsQuestions
16. Management #dsaccounting #dsfocuses #dsprimarily #dson #dsproviding #dsdata #dsfor:
A) internal #dsuses #dsby #dsmanagers.
B) external #dsuses #dsby #dsstockholders #dsand #dscreditors.
C) external #dsuses #dsby #dsthe #dsInternal #dsRevenue #dsService.
D) external #dsuses #dsby #dsthe #dsSecurities #dsand #dsExchange #dsCommission.
Answer: #dsA # d s #ds Level: #dsEasy # d s #ds LO: #ds1
17. Managerial #dsaccounting:
A) is #dsmore #dsfuture #dsoriented #dsthan #dsfinancial #dsaccounting.
B) tends #dsto #dssummarize #dsinformation #dsmore #dsthan #dsfinancial #dsaccounting
C) is #dsprimarily #dsconcerned #dswith #dsproviding #dsinformation #dsto #dsexternal #dsusers.
D) is #dsmore #dsconcerned #dswith #dsprecision #dsthan #dstimeliness.
Answer: #dsA # d s #ds Level: #dsEasy # d s #ds LO: #ds1
18. Compared #dsto #dsfinancial #dsaccounting, #dsmanagerial #dsaccounting #dsplaces #dsmore #dsemphasis #dson:
A) the #dsflexibility #dsof #dsinformation.
B) the #dsprecision #dsof #dsinformation.
C) the #dstimeliness #dsof #dsinformation.
D) both #dsA #dsand #dsC #dsabove.
Answer: #dsD # d s #ds Level: #dsEasy # d s #ds LO: #ds1
19. The #dsfunction #dsof #dsmanagement #dsthat #dscompares #dsplanned #dsresults #dsto #dsactual #dsresults
#dsis #dsknown #dsas:
A) planning.
B) directing #dsand #dsmotivating.
C) controlling.
D) decision #dsmaking.
Answer: #dsC # d s #ds Level: #dsEasy # d s #ds LO: #ds2
20. Which #dsof #dsthe #dsfunctions #dsof #dsmanagement #dsinvolves #dsoverseeing #dsday-to-day #dsactivities?
A) Planning
B) Directing #dsand #dsmotivating
C) Controlling
D) Decision #dsmaking
Answer: #dsB # d s #ds Level: #dsEasy # d s #ds LO: #ds2
Garrison, #dsManagerial #dsAccounting, #ds12th #dsEdition 5
SCHOLARVAULT
