1-1 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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TESTBANK
ManagerialAccounting4thEdition
ByCharlesDavisElizabethDavis Chapter1-13 g t
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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TableOfContents
1.AccountingasaToolforManagement 2.CostBehavioran gt
dCostEstimation
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3. Cost-Volume-ProfitAnalysisandPricing Decisions gt
4. ProductCostsandJobOrderCosting
gt
5. PlanningandForecasting
5A:PlanningandForecastinginaRetailSetting*(onlineonly)
6. PerformanceEvaluation:VarianceAnalysis
7. Activity-BasedCostingandActivity-BasedManagement
8. UsingAccountingInformationtoMakeManagerialDecisions
9. CapitalBudgeting
10. DecentralizationandPerformanceEvaluation
11. PerformanceEvaluationRevisited:ABalancedApproach
12. FinancialStatementAnalysis
13. StatementofCashFlows
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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Chapter1
AccountingasaToolforManagement gt gt
CHAPTER LEARNINGOBJECTIVES
jl
1. Definemanagerialaccounting(Unit1.1)
There areseveralformaldefinitions of managerialaccounting. Asimpleone is “thege n
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eration ofrelevant information to support management’s decision-
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making activities.” gt
2. Describethedifferencesbetweenmanagerialandfinancialaccounting(U n jl gt
it1.1)
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Managerial accounting’s primary usersare managers and decision makerswithin an organi z
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ation, whereas financial accounting is aimed primarilyat external users. Unlike GAAP that g
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uides financial accounting, therearenomandated rules in managerial accounting. Manag er
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ial accountingreportsfocus onoperatingsegments, while financialaccounting statement s re
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port results fortheorganization asawhole. Managerial accounting is concerned more w ith p
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rojecting future results than reportingpast results. Managerial information is prepare d tot
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ake advantage ofawindow of opportunity, evenif someaccuracymustbesacrificed. Fi nanci
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al accountinginformation is balanced to thepenny and is delivered after theendof th e acco
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unting period. jl
3. Listanddescribethefourfunctions ofmanagers(Unit1.1) gt gt gt jl
Planning means settingadirection fortheorganization. Long-
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term,orstrategicplanningprovides direction forafive- to ten-year period. Short-
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termoroperational planning provides more detailed guidance forthecomingyear; it transl gt jl gt gt gt gt gt gt gt
ates the company’s strategy into action steps. Controlling is the monitoring ofday-to-
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dayoperationsto identify anyproblems that require correctiveaction. Evaluating is the pro ce
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ss of comparing aparticular period’s actualresultstoplanned results, forthepurpose of a sse
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ssing managerial performance. Decision making means choosing between alternativec ours
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es of action.
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4. Explainhowthe selection ofaparticular business strategy determines theinf gt gt gt jl gt gt gt
ormation thatmanagers need torunanorganization effectively (Unit 1.2)
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To run abusiness effectively, managers need information that shows howwell operatio
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ns are meeting the organization’s strategicgoals. For instance, if the organization’s strat
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egy is tobea low-
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cost producer, information about product costsand cost variances will bemoreusefult
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o managers than information about researchand development.
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, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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5. Discusstheimportanceofethicalbehaviorinmanagerialaccounting(Unit1.3 jl
)
Ethicalbehavior means knowingrightfrom wrong and then doing the right thing. Manyco m
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paniesand most professional organizations havecodes of conduct toguide employees’ actio
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ns.Acting unethicallycan leadtoillegalactivity andultimatelytothe destruction ofth efirm. Fu
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rthermore, research has shownthat a public commitment toethical behavior can leadtosup
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eriorfinancialperformance. gt
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TESTBANK
ManagerialAccounting4thEdition
ByCharlesDavisElizabethDavis Chapter1-13 g t
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
gt gt gt gt gt gt gt gt
TableOfContents
1.AccountingasaToolforManagement 2.CostBehavioran gt
dCostEstimation
gt
3. Cost-Volume-ProfitAnalysisandPricing Decisions gt
4. ProductCostsandJobOrderCosting
gt
5. PlanningandForecasting
5A:PlanningandForecastinginaRetailSetting*(onlineonly)
6. PerformanceEvaluation:VarianceAnalysis
7. Activity-BasedCostingandActivity-BasedManagement
8. UsingAccountingInformationtoMakeManagerialDecisions
9. CapitalBudgeting
10. DecentralizationandPerformanceEvaluation
11. PerformanceEvaluationRevisited:ABalancedApproach
12. FinancialStatementAnalysis
13. StatementofCashFlows
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
gt gt gt gt gt gt gt gt
Chapter1
AccountingasaToolforManagement gt gt
CHAPTER LEARNINGOBJECTIVES
jl
1. Definemanagerialaccounting(Unit1.1)
There areseveralformaldefinitions of managerialaccounting. Asimpleone is “thege n
gt gt gt gt gt gt gt jl gt
eration ofrelevant information to support management’s decision-
gt gt gt gt gt gt
making activities.” gt
2. Describethedifferencesbetweenmanagerialandfinancialaccounting(U n jl gt
it1.1)
gt
Managerial accounting’s primary usersare managers and decision makerswithin an organi z
gt gt gt gt gt gt gt gt gt gt
ation, whereas financial accounting is aimed primarilyat external users. Unlike GAAP that g
gt gt gt gt jl gt gt gt gt gt jlg t
uides financial accounting, therearenomandated rules in managerial accounting. Manag er
gt gt gt gt gt gt gt gt gt
ial accountingreportsfocus onoperatingsegments, while financialaccounting statement s re
gt gt gt jl jl gt
port results fortheorganization asawhole. Managerial accounting is concerned more w ith p
jl gt gt gt gt gt gt gt gt gt
rojecting future results than reportingpast results. Managerial information is prepare d tot
jl gt gt gt gt gt gt gt jl gt gt
ake advantage ofawindow of opportunity, evenif someaccuracymustbesacrificed. Fi nanci
gt gt gt gt gt gt gt gt
al accountinginformation is balanced to thepenny and is delivered after theendof th e acco
gt gt jl gt gt gt gt gt gt gt gt gt
unting period. jl
3. Listanddescribethefourfunctions ofmanagers(Unit1.1) gt gt gt jl
Planning means settingadirection fortheorganization. Long-
jl gt gt gt
term,orstrategicplanningprovides direction forafive- to ten-year period. Short-
gt gt gt gt gt gt gt
termoroperational planning provides more detailed guidance forthecomingyear; it transl gt jl gt gt gt gt gt gt gt
ates the company’s strategy into action steps. Controlling is the monitoring ofday-to-
gt jl gt gt gt gt jl gt gt gt
dayoperationsto identify anyproblems that require correctiveaction. Evaluating is the pro ce
gt gt gt gt gt jl gt gt gt jl gt gt
ss of comparing aparticular period’s actualresultstoplanned results, forthepurpose of a sse
gt gt gt gt gt gt gt gt gt gt
ssing managerial performance. Decision making means choosing between alternativec ours
gt gt gt gt gt gt gt gt gt
es of action.
gt gt
4. Explainhowthe selection ofaparticular business strategy determines theinf gt gt gt jl gt gt gt
ormation thatmanagers need torunanorganization effectively (Unit 1.2)
gt gt gt gt gt gt
To run abusiness effectively, managers need information that shows howwell operatio
gt gt gt gt jl gt gt gt gt gt gt
ns are meeting the organization’s strategicgoals. For instance, if the organization’s strat
jl jl gt gt gt gt gt gt jl gt
egy is tobea low-
gt gt gt
cost producer, information about product costsand cost variances will bemoreusefult
jl gt gt gt gt jl gt gt jl gt gt
o managers than information about researchand development.
gt gt gt gt jl gt
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
gt gt gt gt gt gt gt gt
5. Discusstheimportanceofethicalbehaviorinmanagerialaccounting(Unit1.3 jl
)
Ethicalbehavior means knowingrightfrom wrong and then doing the right thing. Manyco m
gt gt gt gt gt jl gt jl gt gt
paniesand most professional organizations havecodes of conduct toguide employees’ actio
gt gt gt gt gt gt gt gt gt gt gt
ns.Acting unethicallycan leadtoillegalactivity andultimatelytothe destruction ofth efirm. Fu
gt jl gt gt gt gt gt gt gt gt gt gt gt
rthermore, research has shownthat a public commitment toethical behavior can leadtosup
gt gt gt gt jl gt gt gt
eriorfinancialperformance. gt
