Test Bank for Managerial Accounting 4th Edition By Charles Davis & Elizabeth Davis, ISBN: 9781119577669, All 13 Chapters Covered, Verified Latest Edition

1-1 Test Bank for Davis & Davis, Managerial Accounting, 4/
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TEST BANK
Managerial Accounting 4th Edition
By Charles Davis Elizabeth Davis Chapter 1 - 13

, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/
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Table Of Contents VP VP




1. Accounting as a Tool for Management
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2.Cost Behavior and Cost Estimation
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3. Cost-Volume-Profit Analysis and Pricing Decisions
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4. Product Costs and Job Order Costing
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5. Planning and Forecasting
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5A: Planning and Forecasting in a Retail Setting* (online only)
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6. Performance Evaluation: Variance Analysis
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7. Activity-Based Costing and Activity-Based Management
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8. Using Accounting Information to Make Managerial Decisions
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9. Capital Budgeting
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10. Decentralization and Performance Evaluation
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11. Performance Evaluation Revisited: A Balanced Approach
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12. Financial Statement Analysis
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13. Statement of Cash Flows
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Chapter 1 VP




Accounting as a Tool for Management VP VP VP VP VP




CHAPTER LEARNING OBJECTIVES
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1. Define managerial accounting (Unit 1.1) VP VP VP VP



There are several formal definitions of managerial accounting. A simple one is “th
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egeneration of relevant information to support management’s decision-
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making activities.” VP




2. Describe the differences between managerial and financial accounting
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(Unit 1.1) VP



Managerial accounting’s primary users are managers and decision makers within an or
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ganization, whereas financial accounting is aimed primarily at external users. Unlike G
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AAP that guides financial accounting, there are no mandated rules in managerial accou
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nting. Managerial accounting reports focus on operating segments, while financialacco
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unting statements report results for the organization as a whole. Managerial accountin
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g is concerned more with projecting future results than reporting past results. Manage
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rial information is prepared to take advantage of a window of opportunity, evenif som
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e accuracy must be sacrificed. Financial accounting information is balanced to the pen
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ny and is delivered after the end of the accounting period.
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3. List and describe the four functions of managers (Unit 1.1)
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Planning means setting a direction for the organization. Long-
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term, or strategic planningprovides direction for a five- to ten-year period. Short-
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term or operational planning provides more detailed guidance for the coming year; it t
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ranslates the company’s strategy into action steps. Controlling is the monitoring of day
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-to-
day operations to identify any problems that require corrective action. Evaluating is th
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e process of comparing a particular period’s actual results to planned results, for the p
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urpose of assessing managerial performance. Decision making means choosing betwee
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n alternative courses of action.
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4. Explain how the selection of a particular business strategy determines th
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einformation that managers need to run an organization effectively (Unit
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1.2)
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To run a business effectively, managers need information that shows how well ope
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rations are meeting the organization’s strategic goals. For instance, if the organizati
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on’s strategy is to be a low-
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cost producer, information about product costsand cost variances will be more usef
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ul to managers than information about researchand development.
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5. Discuss the importance of ethical behavior in managerial accounting (Unit
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1.3)
Ethical behavior means knowing right from wrong and then doing the right thing. Ma
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nycompanies and most professional organizations have codes of conduct to guide em
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ployees’ actions. Acting unethically can lead to illegal activity and ultimately to the de
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struction of the firm. Furthermore, research has shown that a public commitment toe
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thical behavior can lead to superior financial performance.
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