1-1 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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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/e
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Table Of Contents RD RD
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
RD RD RD
5A: Planning and Forecasting in a Retail Setting* (online only)
RD RD RD RD RD RD RD RD RD
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
RD RD RD RD
11. Performance Evaluation Revisited: A Balanced Approach
RD RD RD RD RD RD
12. Financial Statement Analysis
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13. Statement of Cash Flows
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,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
RD RD RD RD RD RD RD RD
Chapter 1 RD
Accounting as a Tool for Management RD RD RD RD RD
CHAPTER LEARNING OBJECTIVES
RD RD
1. Define managerial accounting (Unit 1.1) RD RD RD RD
There are several formal definitions of managerial accounting. A simple one is “theg
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D
eneration of relevant information to support management’s decision- RD RD RD RD RD RD RD
making activities.” RD
2. Describe the differences between managerial and financial accounting( RD RD RD RD RD RD RD R
D
Unit 1.1) RD
Managerial accounting’s primary users are managers and decision makers within an orga
RD RD RD RD RD RD RD RD RD RD RD
nization, whereas financial accounting is aimed primarily at external users. Unlike GAAP t
RD RD RD RD RD RD RD RD RD RD RD RD
hat guides financial accounting, there are no mandated rules in managerial accounting.
RD RD RD RD RD RD RD RD RD RD RD RD
Managerial accounting reports focus on operating segments, while financialaccounting st
RD RD RD RD RD RD RD RD R
D RD
atements report results for the organization as a whole. Managerial accounting is concer
RD RD RD RD RD RD RD RD RD RD RD RD
ned more with projecting future results than reporting past results. Managerial informati
RD RD RD RD RD RD RD RD RD RD RD
on is prepared to take advantage of a window of opportunity, evenif some accuracy must
RD RD RD RD RD RD RD RD RD RD RD R
D RD RD RD R
be sacrificed. Financial accounting information is balanced to the penny and is delivered
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after the end of the accounting period.
RD RD RD RD RD RD
3. List and describe the four functions of managers (Unit 1.1)
RD RD RD RD RD RD RD RD RD
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-
RD RD RD R
D RD RD RD RD RD RD RD RD
term or operational planning provides more detailed guidance for the coming year; it tra
RD RD RD RD RD RD RD RD RD RD RD RD RD
nslates the company’s strategy into action steps. Controlling is the monitoring of day-to-
RD RD RD RD RD RD RD RD RD RD RD RD
day operations to identify any problems that require corrective action. Evaluating is the p
RD RD RD RD RD RD RD RD RD RD RD RD RD
rocess of comparing a particular period’s actual results to planned results, for the purpos
RD RD RD RD RD RD RD RD RD RD RD RD RD
e of assessing managerial performance. Decision making means choosing between altern
RD RD RD RD RD RD RD RD RD RD
ative courses of action. RD RD RD
4. Explain how the selection of a particular business strategy determines thei
RD RD RD RD RD RD RD RD RD RD R
D
nformation that managers need to run an organization effectively (Unit 1.2 RD RD RD RD RD RD RD RD RD RD
)
To run a business effectively, managers need information that shows how well operat
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ions are meeting the organization’s strategic goals. For instance, if the organization’s
RD RD RD RD RD RD RD RD RD RD RD RD
strategy is to be a low- RD RD RD RD RD
cost producer, information about product costsand cost variances will be more useful
RD RD RD RD RD R
D RD RD RD RD RD RD R
to managers than information about researchand development.
D RD RD RD RD RD R
D RD
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
RD RD RD RD RD RD RD RD
5. Discuss the importance of ethical behavior in managerial accounting (Unit1.
RD RD RD RD RD RD RD RD RD R
D
3)
Ethical behavior means knowing right from wrong and then doing the right thing. Manyc
RD RD RD RD RD RD RD RD RD RD RD RD RD R
D
ompanies and most professional organizations have codes of conduct to guide employe
RD RD RD RD RD RD RD RD RD RD RD
es’ actions. Acting unethically can lead to illegal activity and ultimately to the destructio
RD RD RD RD RD RD RD RD RD RD RD RD RD
n of the firm. Furthermore, research has shown that a public commitment toethical beh
RD RD RD RD RD RD RD RD RD RD RD RD R
D RD
avior can lead to superior financial performance.
RD RD RD RD RD RD
RD RD RD RD RD RD RD RD
TEST BANK
Managerial Accounting 4th Edition
By Charles Davis Elizabeth Davis Chapter 1 - 13
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
RD RD RD RD RD RD RD RD
Table Of Contents RD RD
1. Accounting as a Tool for Management
RD RD RD RD RD RD
2.Cost Behavior and Cost Estimation
RD RD RD RD
3. Cost-Volume-Profit Analysis and Pricing Decisions
RD RD RD RD RD
4. Product Costs and Job Order Costing
RD RD RD RD RD RD
5. Planning and Forecasting
RD RD RD
5A: Planning and Forecasting in a Retail Setting* (online only)
RD RD RD RD RD RD RD RD RD
6. Performance Evaluation: Variance Analysis
RD RD RD RD
7. Activity-Based Costing and Activity-Based Management
RD RD RD RD RD
8. Using Accounting Information to Make Managerial Decisions
RD RD RD RD RD RD RD
9. Capital Budgeting
RD RD
10. Decentralization and Performance Evaluation
RD RD RD RD
11. Performance Evaluation Revisited: A Balanced Approach
RD RD RD RD RD RD
12. Financial Statement Analysis
RD RD RD
13. Statement of Cash Flows
RD RD RD RD RD
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
RD RD RD RD RD RD RD RD
Chapter 1 RD
Accounting as a Tool for Management RD RD RD RD RD
CHAPTER LEARNING OBJECTIVES
RD RD
1. Define managerial accounting (Unit 1.1) RD RD RD RD
There are several formal definitions of managerial accounting. A simple one is “theg
RD RD RD RD RD RD RD RD RD RD RD RD R
D
eneration of relevant information to support management’s decision- RD RD RD RD RD RD RD
making activities.” RD
2. Describe the differences between managerial and financial accounting( RD RD RD RD RD RD RD R
D
Unit 1.1) RD
Managerial accounting’s primary users are managers and decision makers within an orga
RD RD RD RD RD RD RD RD RD RD RD
nization, whereas financial accounting is aimed primarily at external users. Unlike GAAP t
RD RD RD RD RD RD RD RD RD RD RD RD
hat guides financial accounting, there are no mandated rules in managerial accounting.
RD RD RD RD RD RD RD RD RD RD RD RD
Managerial accounting reports focus on operating segments, while financialaccounting st
RD RD RD RD RD RD RD RD R
D RD
atements report results for the organization as a whole. Managerial accounting is concer
RD RD RD RD RD RD RD RD RD RD RD RD
ned more with projecting future results than reporting past results. Managerial informati
RD RD RD RD RD RD RD RD RD RD RD
on is prepared to take advantage of a window of opportunity, evenif some accuracy must
RD RD RD RD RD RD RD RD RD RD RD R
D RD RD RD R
be sacrificed. Financial accounting information is balanced to the penny and is delivered
D RD RD RD RD RD RD RD RD RD RD RD RD RD
after the end of the accounting period.
RD RD RD RD RD RD
3. List and describe the four functions of managers (Unit 1.1)
RD RD RD RD RD RD RD RD RD
Planning means setting a direction for the organization. Long-
RD RD RD RD RD RD RD RD
term, or strategic planningprovides direction for a five- to ten-year period. Short-
RD RD RD R
D RD RD RD RD RD RD RD RD
term or operational planning provides more detailed guidance for the coming year; it tra
RD RD RD RD RD RD RD RD RD RD RD RD RD
nslates the company’s strategy into action steps. Controlling is the monitoring of day-to-
RD RD RD RD RD RD RD RD RD RD RD RD
day operations to identify any problems that require corrective action. Evaluating is the p
RD RD RD RD RD RD RD RD RD RD RD RD RD
rocess of comparing a particular period’s actual results to planned results, for the purpos
RD RD RD RD RD RD RD RD RD RD RD RD RD
e of assessing managerial performance. Decision making means choosing between altern
RD RD RD RD RD RD RD RD RD RD
ative courses of action. RD RD RD
4. Explain how the selection of a particular business strategy determines thei
RD RD RD RD RD RD RD RD RD RD R
D
nformation that managers need to run an organization effectively (Unit 1.2 RD RD RD RD RD RD RD RD RD RD
)
To run a business effectively, managers need information that shows how well operat
RD RD RD RD RD RD RD RD RD RD RD RD
ions are meeting the organization’s strategic goals. For instance, if the organization’s
RD RD RD RD RD RD RD RD RD RD RD RD
strategy is to be a low- RD RD RD RD RD
cost producer, information about product costsand cost variances will be more useful
RD RD RD RD RD R
D RD RD RD RD RD RD R
to managers than information about researchand development.
D RD RD RD RD RD R
D RD
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
RD RD RD RD RD RD RD RD
5. Discuss the importance of ethical behavior in managerial accounting (Unit1.
RD RD RD RD RD RD RD RD RD R
D
3)
Ethical behavior means knowing right from wrong and then doing the right thing. Manyc
RD RD RD RD RD RD RD RD RD RD RD RD RD R
D
ompanies and most professional organizations have codes of conduct to guide employe
RD RD RD RD RD RD RD RD RD RD RD
es’ actions. Acting unethically can lead to illegal activity and ultimately to the destructio
RD RD RD RD RD RD RD RD RD RD RD RD RD
n of the firm. Furthermore, research has shown that a public commitment toethical beh
RD RD RD RD RD RD RD RD RD RD RD RD R
D RD
avior can lead to superior financial performance.
RD RD RD RD RD RD
