Chapter 1 Introduction to Managerial Accounting
Accounting information is considered relevant when it has the attributes of verifiability, neutrality, and
predictive power (T/F) - ✔✔False
Accounting information is considered to be relevant when it is timely, has predictive value, and has
feedback value (T/F) - ✔✔True
depreciation of factory machinery - ✔✔manufacturing overhead
Direct costs are often difficult to trace to the specific cost object under consideration. (T/F) - ✔✔False
engine - ✔✔direct materials
factory machinery lubricants - ✔✔manufacturing overhead (indirect materials)
Financial accounting is broader in scope than management accounting. (T/F) - ✔✔False
Financial accounting must comply with GAAP (T/F) - ✔✔true
Management accounting information typically includes - ✔✔A) tabulated results of customer
satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
Managerial accounting measures the costs of production, whereas financial accounting measures a
financial position of a company to investors, banks, and other external parties (T/F) - ✔✔True
Managerial Accounting provides financial accounting with the necessary information for income
determination and inventory valuation (T/F) - ✔✔True
Accounting information is considered relevant when it has the attributes of verifiability, neutrality, and
predictive power (T/F) - ✔✔False
Accounting information is considered to be relevant when it is timely, has predictive value, and has
feedback value (T/F) - ✔✔True
depreciation of factory machinery - ✔✔manufacturing overhead
Direct costs are often difficult to trace to the specific cost object under consideration. (T/F) - ✔✔False
engine - ✔✔direct materials
factory machinery lubricants - ✔✔manufacturing overhead (indirect materials)
Financial accounting is broader in scope than management accounting. (T/F) - ✔✔False
Financial accounting must comply with GAAP (T/F) - ✔✔true
Management accounting information typically includes - ✔✔A) tabulated results of customer
satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
Managerial accounting measures the costs of production, whereas financial accounting measures a
financial position of a company to investors, banks, and other external parties (T/F) - ✔✔True
Managerial Accounting provides financial accounting with the necessary information for income
determination and inventory valuation (T/F) - ✔✔True
