True/False Questions
1. Management accounting seeks to provide useful information primarily to those
outside an organization.
Answer: False LO: 1 Difficulty: Easy
2. A church building is an organization.
Answer: False LO: 1 Difficulty: Easy
3. Strategic planning in a business is essentially a top-level management planning
function and determines what to produce and how to market that production.
Answer: True LO: 1 Difficulty: Easy
4. The types of products offered for sale by a company may depend on the image it
seeks to convey to its customers.
Answer: True LO: 1 Difficulty: Easy
5. The receiving department in a department store is an example of a line department.
Answer: False LO: 2 Difficulty: Easy
,6. In a profit seeking company, a line department is a profit generating department.
Answer: True LO: 2 Difficulty: Easy
7. Both line and staff departments may be responsibility centers.
Answer: True LO: 2 Difficulty: Medium
8. The primary function of an organization chart is to show the informal lines of
communication and responsibility in an organization.
Answer: False LO: 2 Difficulty: Medium
9. Coordination of business segments involves integrating the plans of two or more
business segments.
Answer: True LO: 3 Difficulty: Easy
,10. The manager of a shipping department in a department store would engage in
strategic planning for the company.
Answer: False LO: 3 Difficulty: Easy
11. The way the human and physical resources are joined together to achieve an
organization’s goals is part of the organizing function.
Answer: True LO: 3 Difficulty: Medium
12. A manager assisting a service department employee in repairing a customer’s
television set is engaging in a management function.
Answer: False LO: 3 Difficulty: Easy
13. Virtually every organization will have one or more objectives it is trying to achieve.
Answer: True LO: 4 Difficulty: Easy
14. Virtually every organization will have an organization chart showing the formal and
informal lines of responsibility and communications.
Answer: False LO: 4 Difficulty: Easy
15. Mangers typically are engaged in decision making when performing the planning,
organizing, directing, and controlling functions.
, Answer: True LO: 4 Difficulty: Easy
16. A most important quality of information is that it has relevance to a decision to be
made.
Answer: True LO: 5 Difficulty: Easy
17. Both financial and management accounting information are heavily based on the
same operating information.
Answer: True LO: 5 Difficulty: Easy
18. Certain information regarding a thing may be more useful if it is in quantitative
format than in nonquantitative format.
Answer: True LO: 5 Difficulty: Easy
1. Management accounting seeks to provide useful information primarily to those
outside an organization.
Answer: False LO: 1 Difficulty: Easy
2. A church building is an organization.
Answer: False LO: 1 Difficulty: Easy
3. Strategic planning in a business is essentially a top-level management planning
function and determines what to produce and how to market that production.
Answer: True LO: 1 Difficulty: Easy
4. The types of products offered for sale by a company may depend on the image it
seeks to convey to its customers.
Answer: True LO: 1 Difficulty: Easy
5. The receiving department in a department store is an example of a line department.
Answer: False LO: 2 Difficulty: Easy
,6. In a profit seeking company, a line department is a profit generating department.
Answer: True LO: 2 Difficulty: Easy
7. Both line and staff departments may be responsibility centers.
Answer: True LO: 2 Difficulty: Medium
8. The primary function of an organization chart is to show the informal lines of
communication and responsibility in an organization.
Answer: False LO: 2 Difficulty: Medium
9. Coordination of business segments involves integrating the plans of two or more
business segments.
Answer: True LO: 3 Difficulty: Easy
,10. The manager of a shipping department in a department store would engage in
strategic planning for the company.
Answer: False LO: 3 Difficulty: Easy
11. The way the human and physical resources are joined together to achieve an
organization’s goals is part of the organizing function.
Answer: True LO: 3 Difficulty: Medium
12. A manager assisting a service department employee in repairing a customer’s
television set is engaging in a management function.
Answer: False LO: 3 Difficulty: Easy
13. Virtually every organization will have one or more objectives it is trying to achieve.
Answer: True LO: 4 Difficulty: Easy
14. Virtually every organization will have an organization chart showing the formal and
informal lines of responsibility and communications.
Answer: False LO: 4 Difficulty: Easy
15. Mangers typically are engaged in decision making when performing the planning,
organizing, directing, and controlling functions.
, Answer: True LO: 4 Difficulty: Easy
16. A most important quality of information is that it has relevance to a decision to be
made.
Answer: True LO: 5 Difficulty: Easy
17. Both financial and management accounting information are heavily based on the
same operating information.
Answer: True LO: 5 Difficulty: Easy
18. Certain information regarding a thing may be more useful if it is in quantitative
format than in nonquantitative format.
Answer: True LO: 5 Difficulty: Easy
