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, Chapter 1 Introduction to Managerial
Accounting

1.1 Identify managers' three primary responsibilities

1) Evaluating operations by comparing actual results to budgeted results is a part of the
controlling responsibility of management.
Correct Answer:
TRUE Diff: 1
LO: 1-1
EOC: QC1-
1
AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.

2) Controlling means overseeing the companyʹs day-to-day
operations. Correct Answer: FALSE
Diff: 1
LO: 1-1
EOC: QC1-
1
AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.

3) The purpose of managerial accounting is to gather, summarize, and report the cost and revenue
data relevant to each decision that is made.
Correct Answer:
TRUE Diff: 1
LO: 1-1
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EOC: QC1-
1
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AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
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organization.
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4) Budgeting is the process of evaluating the results of business operations against a plan and
then making adjustments to that plan.
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Correct Answer:
FALSE Diff: 1
A




LO: 1-1
EOC: QC1-
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1
AACSB: Reflective thinking
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2
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,Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.




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, 5) Planning, directing, and controlling are a managerʹs three primary decision-making
responsibilities. Correct Answer: TRUE
Diff: 1
LO: 1-1
EOC: QC1-
1
AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.

6) Directing means setting goals and objectives for the company and determining how to achieve
them. Correct Answer: FALSE
Diff: 1
LO: 1-1
EOC: S1-1
AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.

7) Budgets are the quantitative expression of managementʹs
plans. Correct Answer: TRUE
Diff: 1
LO: 1-1
EOC: S1-1
AACSB: Reflective thinking
Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.

8) gathers, summarizes, and reports on the financial impact of changes to business operations.
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A) Managerial accounting
B) Planning
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C) Directing
D) Controllin
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g Correct
Answer: A
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Diff: 2
LO: 1-1
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EOC: S1-1
AACSB: Reflective thinking
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Learning Outcome: Describe the basics of managerial accounting and its function within an
organization.
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