1-1 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
TEST BANK
7%
Managerial Accounting 4th Edition
7% 7% 7% 7%
By Charles Davis Elizabeth Davis Chapter 1 - 13
7% 7% 7% 7% 7%7%7% 7% 7% 7%
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
Table Of Contents7% 7%
1. Accounting as a Tool for Management
7% 7% 7% 7% 7% 7%
2.Cost Behavior and Cost Estimation
7% 7% 7% 7%
3. Cost-Volume-Profit Analysis and Pricing Decisions
7% 7% 7% 7% 7%
4. Product Costs and Job Order Costing
7% 7% 7% 7% 7% 7%
5. Planning and Forecasting
7% 7% 7%
5A: Planning and Forecasting in a Retail Setting* (online only)
7% 7% 7% 7% 7% 7% 7% 7% 7%
6. Performance Evaluation: Variance Analysis
7% 7% 7% 7%
7. Activity-Based Costing and Activity-Based Management
7% 7% 7% 7% 7%
8. Using Accounting Information to Make Managerial Decisions
7% 7% 7% 7% 7% 7% 7%
9. Capital Budgeting
7% 7%
10. Decentralization and Performance Evaluation
7% 7% 7% 7%
11. Performance Evaluation Revisited: A Balanced Approach
7% 7% 7% 7% 7% 7%
12. Financial Statement Analysis
7% 7% 7%
13. Statement of Cash Flows
7% 7% 7% 7% 7%
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
Chapter 1 7%
Accounting as a Tool for Management 7% 7% 7% 7% 7%
CHAPTER LEARNING OBJECTIVES
7% 7%
1. Define managerial accounting (Unit 1.1)
7% 7% 7% 7%
There are several formal definitions of managerial accounting. A simple one is “t
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
hegeneration of relevant information to support management’s decision-
7
% 7% 7% 7% 7% 7% 7% 7%
making activities.” 7%
2. Describe the differences between managerial and financial accounting
7% 7% 7% 7% 7% 7% 7% 7
%
(Unit 1.1) 7%
Managerial accounting’s primary users are managers and decision makers within an o
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
rganization, whereas financial accounting is aimed primarily at external users. Unlike
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
GAAP that guides financial accounting, there are no mandated rules in managerial acc
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ounting. Managerial accounting reports focus on operating segments, while financiala
7% 7% 7% 7% 7% 7% 7% 7% 7% 7
%
ccounting statements report results for the organization as a whole. Managerial accou
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nting is concerned more with projecting future results than reporting past results. Ma
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nagerial information is prepared to take advantage of a window of opportunity, eveni
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7
%
f some accuracy must be sacrificed. Financial accounting information is balanced to th
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
e penny and is delivered after the end of the accounting period.
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
3. List and describe the four functions of managers (Unit 1.1)
7% 7% 7% 7% 7% 7% 7% 7% 7%
Planning means setting a direction for the organization. Long-
7% 7% 7% 7% 7% 7% 7% 7%
term, or strategic planningprovides direction for a five- to ten-year period. Short-
7% 7% 7% 7
% 7% 7% 7% 7% 7% 7% 7% 7%
term or operational planning provides more detailed guidance for the coming year; it
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
translates the company’s strategy into action steps. Controlling is the monitoring of d
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ay-to-
day operations to identify any problems that require corrective action. Evaluating is t
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
he process of comparing a particular period’s actual results to planned results, for the
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
purpose of assessing managerial performance. Decision making means choosing betw
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
een alternative courses of action.
7% 7% 7% 7%
4. Explain how the selection of a particular business strategy determines th
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
einformation that managers need to run an organization effectively (Uni
7
% 7% 7% 7% 7% 7% 7% 7% 7% 7%
t 1.2)
7%
To run a business effectively, managers need information that shows how well op
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
erations are meeting the organization’s strategic goals. For instance, if the organiz
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ation’s strategy is to be a low-7% 7% 7% 7% 7% 7%
cost producer, information about product costsand cost variances will be more us
7% 7% 7% 7% 7% 7
% 7% 7% 7% 7% 7% 7%
eful to managers than information about researchand development.
7% 7% 7% 7% 7% 7% 7
% 7%
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
5. Discuss the importance of ethical behavior in managerial accounting (Uni
7% 7% 7% 7% 7% 7% 7% 7% 7%
t1.3)
7
%
Ethical behavior means knowing right from wrong and then doing the right thing. Ma
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nycompanies and most professional organizations have codes of conduct to guide e
7
% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
mployees’ actions. Acting unethically can lead to illegal activity and ultimately to the
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
destruction of the firm. Furthermore, research has shown that a public commitment
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
toethical behavior can lead to superior financial performance.
7
% 7% 7% 7% 7% 7% 7% 7%
7% 7% 7% 7% 7% 7% 7% 7%
/e
TEST BANK
7%
Managerial Accounting 4th Edition
7% 7% 7% 7%
By Charles Davis Elizabeth Davis Chapter 1 - 13
7% 7% 7% 7% 7%7%7% 7% 7% 7%
, 1-2 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
Table Of Contents7% 7%
1. Accounting as a Tool for Management
7% 7% 7% 7% 7% 7%
2.Cost Behavior and Cost Estimation
7% 7% 7% 7%
3. Cost-Volume-Profit Analysis and Pricing Decisions
7% 7% 7% 7% 7%
4. Product Costs and Job Order Costing
7% 7% 7% 7% 7% 7%
5. Planning and Forecasting
7% 7% 7%
5A: Planning and Forecasting in a Retail Setting* (online only)
7% 7% 7% 7% 7% 7% 7% 7% 7%
6. Performance Evaluation: Variance Analysis
7% 7% 7% 7%
7. Activity-Based Costing and Activity-Based Management
7% 7% 7% 7% 7%
8. Using Accounting Information to Make Managerial Decisions
7% 7% 7% 7% 7% 7% 7%
9. Capital Budgeting
7% 7%
10. Decentralization and Performance Evaluation
7% 7% 7% 7%
11. Performance Evaluation Revisited: A Balanced Approach
7% 7% 7% 7% 7% 7%
12. Financial Statement Analysis
7% 7% 7%
13. Statement of Cash Flows
7% 7% 7% 7% 7%
,1-3 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
Chapter 1 7%
Accounting as a Tool for Management 7% 7% 7% 7% 7%
CHAPTER LEARNING OBJECTIVES
7% 7%
1. Define managerial accounting (Unit 1.1)
7% 7% 7% 7%
There are several formal definitions of managerial accounting. A simple one is “t
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
hegeneration of relevant information to support management’s decision-
7
% 7% 7% 7% 7% 7% 7% 7%
making activities.” 7%
2. Describe the differences between managerial and financial accounting
7% 7% 7% 7% 7% 7% 7% 7
%
(Unit 1.1) 7%
Managerial accounting’s primary users are managers and decision makers within an o
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
rganization, whereas financial accounting is aimed primarily at external users. Unlike
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
GAAP that guides financial accounting, there are no mandated rules in managerial acc
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ounting. Managerial accounting reports focus on operating segments, while financiala
7% 7% 7% 7% 7% 7% 7% 7% 7% 7
%
ccounting statements report results for the organization as a whole. Managerial accou
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nting is concerned more with projecting future results than reporting past results. Ma
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nagerial information is prepared to take advantage of a window of opportunity, eveni
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7
%
f some accuracy must be sacrificed. Financial accounting information is balanced to th
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
e penny and is delivered after the end of the accounting period.
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
3. List and describe the four functions of managers (Unit 1.1)
7% 7% 7% 7% 7% 7% 7% 7% 7%
Planning means setting a direction for the organization. Long-
7% 7% 7% 7% 7% 7% 7% 7%
term, or strategic planningprovides direction for a five- to ten-year period. Short-
7% 7% 7% 7
% 7% 7% 7% 7% 7% 7% 7% 7%
term or operational planning provides more detailed guidance for the coming year; it
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
translates the company’s strategy into action steps. Controlling is the monitoring of d
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ay-to-
day operations to identify any problems that require corrective action. Evaluating is t
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
he process of comparing a particular period’s actual results to planned results, for the
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
purpose of assessing managerial performance. Decision making means choosing betw
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
een alternative courses of action.
7% 7% 7% 7%
4. Explain how the selection of a particular business strategy determines th
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
einformation that managers need to run an organization effectively (Uni
7
% 7% 7% 7% 7% 7% 7% 7% 7% 7%
t 1.2)
7%
To run a business effectively, managers need information that shows how well op
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
erations are meeting the organization’s strategic goals. For instance, if the organiz
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
ation’s strategy is to be a low-7% 7% 7% 7% 7% 7%
cost producer, information about product costsand cost variances will be more us
7% 7% 7% 7% 7% 7
% 7% 7% 7% 7% 7% 7%
eful to managers than information about researchand development.
7% 7% 7% 7% 7% 7% 7
% 7%
, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4
7% 7% 7% 7% 7% 7% 7% 7%
/e
5. Discuss the importance of ethical behavior in managerial accounting (Uni
7% 7% 7% 7% 7% 7% 7% 7% 7%
t1.3)
7
%
Ethical behavior means knowing right from wrong and then doing the right thing. Ma
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
nycompanies and most professional organizations have codes of conduct to guide e
7
% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
mployees’ actions. Acting unethically can lead to illegal activity and ultimately to the
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
destruction of the firm. Furthermore, research has shown that a public commitment
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
toethical behavior can lead to superior financial performance.
7
% 7% 7% 7% 7% 7% 7% 7%
