1-1 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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TESTBANK Z
Managerial Accounting 4th EditionZ Z Z
By Charles Davis Elizabeth Davis Chapter 1 - 13
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, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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Table Of Contents Z Z
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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,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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Chapter 1 Z
Accounting as a Tool for Management Z Z Z Z Z
CHAPTER LEARNING OBJECTIVES Z Z
1. Define managerial accounting (Unit 1.1) Z Z Z Z
There are several formal definitions of managerial accounting. A simple one is “thegen
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eration of relevant information to support management’s decision-making activities.”
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2. Describe the differences between managerial and financial accounting(U Z Z Z Z Z Z Z Z
nit 1.1) Z
Managerial accounting’s primary users are managers and decision makers within an organiz Z Z Z Z Z Z Z Z Z Z Z
ation, whereas financial accounting is aimed primarily at external users. Unlike GAAP that gui
Z Z Z Z Z Z Z Z Z Z Z Z Z
des financial accounting, there are no mandated rules in managerial accounting. Managerial
Z Z Z Z Z Z Z Z Z Z Z Z
accounting reports focus on operating segments, while financialaccounting statements rep Z Z Z Z Z Z Z Z Z Z
ort results for the organization as a whole. Managerial accounting is concerned more with pr
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ojecting future results than reporting past results. Managerial information is prepared to tak
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e advantage of a window of opportunity, evenif some accuracy must be sacrificed. Financial a
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ccounting information is balanced to the penny and is delivered after the end of the accounti
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ng 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- Z Z Z Z Z Z Z Z
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 transla
Z Z Z Z Z Z Z Z Z Z Z Z Z
tes the company’s strategy into action steps. Controlling is the monitoring of day-to-
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day operations to identify any problems that require corrective action. Evaluating is the proc
Z Z Z Z Z Z Z Z Z Z Z Z Z
ess of comparing a particular period’s actual results to planned results, for the purpose of ass
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
essing managerial performance. Decision making means choosing between alternative cour
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ses of action. Z Z
4. Explain how the selection of a particular business strategy determines theinf
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ormation that managers need to run an organization effectively (Unit 1.2) Z Z Z Z Z Z Z Z Z Z
To run a business effectively, managers need information that shows how well operation
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s are meeting the organization’s strategic goals. For instance, if the organization’s strateg
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y is to be a low-
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cost producer, information about product costsand cost variances will be more useful to
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managers than information about researchand development. Z Z Z Z Z Z
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
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5. Discuss the importance of ethical behavior in managerial accounting (Unit1.3
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)
Ethical behavior means knowing right from wrong and then doing the right thing. Manycom
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panies and most professional organizations have codes of conduct to guide employees’ acti
Z Z Z Z Z Z Z Z Z Z Z Z
ons. Acting unethically can lead to illegal activity and ultimately to the destruction of the fir
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
m. Furthermore, research has shown that a public commitment toethical behavior can lead
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
to superior financial performance.
Z Z Z
Z Z Z Z Z Z Z Z
TESTBANK Z
Managerial Accounting 4th EditionZ Z Z
By Charles Davis Elizabeth Davis Chapter 1 - 13
Z Z Z Z ZZZ Z Z Z
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Z Z Z Z Z Z Z Z
Table Of Contents Z Z
1. Accounting as a Tool for Management
Z Z Z Z Z Z
2.Cost Behavior and Cost Estimation
Z Z Z Z
3. Cost-Volume-Profit Analysis and Pricing Decisions
Z Z Z Z Z
4. Product Costs and Job Order Costing
Z Z Z Z Z Z
5. Planning and Forecasting
Z Z Z
5A: Planning and Forecasting in a Retail Setting* (online only)
Z Z Z Z Z Z Z Z Z
6. Performance Evaluation: Variance Analysis
Z Z Z Z
7. Activity-Based Costing and Activity-Based Management
Z Z Z Z Z
8. Using Accounting Information to Make Managerial Decisions
Z Z Z Z Z Z Z
9. Capital Budgeting
Z Z
10. Decentralization and Performance Evaluation
Z Z Z Z
11. Performance Evaluation Revisited: A Balanced Approach
Z Z Z Z Z Z
12. Financial Statement Analysis
Z Z Z
13. Statement of Cash Flows
Z Z Z Z Z
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Z Z Z Z Z Z Z Z
Chapter 1 Z
Accounting as a Tool for Management Z Z Z Z Z
CHAPTER LEARNING OBJECTIVES Z Z
1. Define managerial accounting (Unit 1.1) Z Z Z Z
There are several formal definitions of managerial accounting. A simple one is “thegen
Z Z Z Z Z Z Z Z Z Z Z Z Z
eration of relevant information to support management’s decision-making activities.”
Z Z Z Z Z Z Z Z
2. Describe the differences between managerial and financial accounting(U Z Z Z Z Z Z Z Z
nit 1.1) Z
Managerial accounting’s primary users are managers and decision makers within an organiz Z Z Z Z Z Z Z Z Z Z Z
ation, whereas financial accounting is aimed primarily at external users. Unlike GAAP that gui
Z Z Z Z Z Z Z Z Z Z Z Z Z
des financial accounting, there are no mandated rules in managerial accounting. Managerial
Z Z Z Z Z Z Z Z Z Z Z Z
accounting reports focus on operating segments, while financialaccounting statements rep Z Z Z Z Z Z Z Z Z Z
ort results for the organization as a whole. Managerial accounting is concerned more with pr
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ojecting future results than reporting past results. Managerial information is prepared to tak
Z Z Z Z Z Z Z Z Z Z Z Z
e advantage of a window of opportunity, evenif some accuracy must be sacrificed. Financial a
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ccounting information is balanced to the penny and is delivered after the end of the accounti
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
ng period.
Z
3. List and describe the four functions of managers (Unit 1.1)
Z Z Z Z Z Z Z Z Z
Planning means setting a direction for the organization. Long- Z Z Z Z Z Z Z Z
term, or strategic planningprovides direction for a five- to ten-year period. Short-
Z Z Z Z Z Z Z Z Z Z Z Z
term or operational planning provides more detailed guidance for the coming year; it transla
Z Z Z Z Z Z Z Z Z Z Z Z Z
tes the company’s strategy into action steps. Controlling is the monitoring of day-to-
Z Z Z Z Z Z Z Z Z Z Z Z
day operations to identify any problems that require corrective action. Evaluating is the proc
Z Z Z Z Z Z Z Z Z Z Z Z Z
ess of comparing a particular period’s actual results to planned results, for the purpose of ass
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
essing managerial performance. Decision making means choosing between alternative cour
Z Z Z Z Z Z Z Z Z
ses of action. Z Z
4. Explain how the selection of a particular business strategy determines theinf
Z Z Z Z Z Z Z Z Z Z Z
ormation that managers need to run an organization effectively (Unit 1.2) Z Z Z Z Z Z Z Z Z Z
To run a business effectively, managers need information that shows how well operation
Z Z Z Z Z Z Z Z Z Z Z Z
s are meeting the organization’s strategic goals. For instance, if the organization’s strateg
Z Z Z Z Z Z Z Z Z Z Z Z
y is to be a low-
Z Z Z Z Z
cost producer, information about product costsand cost variances will be more useful to
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
managers than information about researchand development. Z Z Z Z Z Z
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/e
Z Z Z Z Z Z Z Z
5. Discuss the importance of ethical behavior in managerial accounting (Unit1.3
Z Z Z Z Z Z Z Z Z Z
)
Ethical behavior means knowing right from wrong and then doing the right thing. Manycom
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
panies and most professional organizations have codes of conduct to guide employees’ acti
Z Z Z Z Z Z Z Z Z Z Z Z
ons. Acting unethically can lead to illegal activity and ultimately to the destruction of the fir
Z Z Z Z Z Z Z Z Z Z Z Z Z Z Z
m. Furthermore, research has shown that a public commitment toethical behavior can lead
Z Z Z Z Z Z Z Z Z Z Z Z Z Z
to superior financial performance.
Z Z Z
