TEST BANK
MANAGEMENT ACCOUNTING
, Testbank
To Accompany
Management Accounting
5th Edition
By
Eldenburg Et
Al.
,Chapter 1: The Role Of Accounting Information In Management
Decision Making
True/False Questions
1. A Vision Statement Is A Theoretical Description Of What An Organisation Should Become.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
2. An Organisational Vision Is A Short-Term Plan For Maximising Financial Results.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
3. Most Organisations Have One Stakeholder.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
4. Organisational Core Competencies Unrelated To The Organisational Vision.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
1.2
,5. Organisational Strategies Are The Tactics That Managers Use To Take Advantage
Of Core Competencies While Working Towards The Organisational Vision.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
6. Most Organisations Have Databases That Contain Information Collected
Formally Or Informally From Internal Sources Only.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
7. Desirable Employee Behaviour Can Be Motivated By Tying Employee
Performance Evaluation And Pay To Long-Term Or Short-Term Results.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
8. Organisational Information Systems Only Collect Accounting Information.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.3
,9. Cost Accounting Information Is Used For Both Management Accounting And
Financial Accounting Activities.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
10. Management Accounting Is The Process Of Gathering, Summarising And
Reporting Financial And Non-Financial Information Used Internally To Make
Decisions.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
11. Intellectual Capital Is A Type Of Financial Resource That Is Captured By The
Organisation’s Information System.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
12. It Is Easy To Differentiate Between Internal And External Reports.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.4
,13. The Design Of The Management Accounting System Structure Is Influenced By
Both External And Internal Factors.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
14. Technological Advances Have Allowed Management Accountants To Develop
Previously Infeasible Cost And Management Accounting Systems.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
15. GAAP Stands For Generally Agreed Accounting Practices.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
16. Only Large Established Organisations Require A Management Accounting Function.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.5
,17. Relevant Information Helps Decision Makers Evaluate And Choose Between
Alternative Courses Of Action.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
18. Recent Information System Development Has Focussed On Business Intelligence
And Disruptive Technologies And Innovation.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
19. Higher Quality Information Is More Certain, Complete, Relevant, Timely And Valuable.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
20. The Use Of Sophisticated Information Systems Means That Uncertainty Is Eliminated.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
1.6
,21. Opportunity Costs Are The Benefits Forgone When We Choose One Alternative
Over The Next Best Alternative.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
22. Cost–Benefit Analysis Means That All Decisions Will Provide A Financial Benefit
To The Organisation.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
23. Tuition Fees Are An Opportunity Cost Of Earning A University Degree.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
24. High Quality Information Will Generally Have Fewer Uncertainties If It Is Based On
Viable Assumptions.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
1.7
,25. Michael Porter Was The First Person To Apply The Generic Value Chain To
The Wine Industry.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
26. The Value Chain Represents The Key Activities Engaged In By An Organisation Or Industry.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
27. The Central Feature Of The Value Chain Is Its Focus On Activities And Processes
Rather Than Functions Or Departments.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
28. A Value Chain Framework Ignores Customers And Suppliers As It Requires The
Organisation To Focus On Its Internal Processes.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
1.8
, 29. Value Chain Analysis Can Be Used In Conjunction With Other Management
Accounting Developments Such As Activity-Based Costing And Strategic Cost
Management.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
30. Value Chain Analysis Can Be Used To Inform Decision Such As Outsourcing And
Strategic Alliances.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
32. Supply Chain Analysis Is Incompatible With Value Chain Analysis As Supply Chain
Is Only Concerned With External Suppliers.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
33. Research And Development Would Be Considered A Downstream Activity In Value
Chain Analysis.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
1.9
MANAGEMENT ACCOUNTING
, Testbank
To Accompany
Management Accounting
5th Edition
By
Eldenburg Et
Al.
,Chapter 1: The Role Of Accounting Information In Management
Decision Making
True/False Questions
1. A Vision Statement Is A Theoretical Description Of What An Organisation Should Become.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
2. An Organisational Vision Is A Short-Term Plan For Maximising Financial Results.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
3. Most Organisations Have One Stakeholder.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
4. Organisational Core Competencies Unrelated To The Organisational Vision.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
1.2
,5. Organisational Strategies Are The Tactics That Managers Use To Take Advantage
Of Core Competencies While Working Towards The Organisational Vision.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
6. Most Organisations Have Databases That Contain Information Collected
Formally Or Informally From Internal Sources Only.
a. True
*B. False
Correct Answer: B
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
7. Desirable Employee Behaviour Can Be Motivated By Tying Employee
Performance Evaluation And Pay To Long-Term Or Short-Term Results.
*A. True
B. False
Correct Answer: A
Learning Objective 1.1 ~ Recognise The Types Of Decisions Managers Make For An
Organisation
8. Organisational Information Systems Only Collect Accounting Information.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.3
,9. Cost Accounting Information Is Used For Both Management Accounting And
Financial Accounting Activities.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
10. Management Accounting Is The Process Of Gathering, Summarising And
Reporting Financial And Non-Financial Information Used Internally To Make
Decisions.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
11. Intellectual Capital Is A Type Of Financial Resource That Is Captured By The
Organisation’s Information System.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
12. It Is Easy To Differentiate Between Internal And External Reports.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.4
,13. The Design Of The Management Accounting System Structure Is Influenced By
Both External And Internal Factors.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
14. Technological Advances Have Allowed Management Accountants To Develop
Previously Infeasible Cost And Management Accounting Systems.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
15. GAAP Stands For Generally Agreed Accounting Practices.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
16. Only Large Established Organisations Require A Management Accounting Function.
a. True
*B. False
Correct Answer: B
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
1.5
,17. Relevant Information Helps Decision Makers Evaluate And Choose Between
Alternative Courses Of Action.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
18. Recent Information System Development Has Focussed On Business Intelligence
And Disruptive Technologies And Innovation.
*A. True
B. False
Correct Answer: A
Learning Objective 1.2 ~ Discuss The Role Of Cost And Management Accounting
Information In Management Decision Making
19. Higher Quality Information Is More Certain, Complete, Relevant, Timely And Valuable.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
20. The Use Of Sophisticated Information Systems Means That Uncertainty Is Eliminated.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
1.6
,21. Opportunity Costs Are The Benefits Forgone When We Choose One Alternative
Over The Next Best Alternative.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
22. Cost–Benefit Analysis Means That All Decisions Will Provide A Financial Benefit
To The Organisation.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
23. Tuition Fees Are An Opportunity Cost Of Earning A University Degree.
a. True
*B. False
Correct Answer: B
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
24. High Quality Information Will Generally Have Fewer Uncertainties If It Is Based On
Viable Assumptions.
*A. True
B. False
Correct Answer: A
Learning Objective 1.3 ~ Communicate How Managers Can Make Higher-Quality
Decisions Using Accounting Information
1.7
,25. Michael Porter Was The First Person To Apply The Generic Value Chain To
The Wine Industry.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
26. The Value Chain Represents The Key Activities Engaged In By An Organisation Or Industry.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
27. The Central Feature Of The Value Chain Is Its Focus On Activities And Processes
Rather Than Functions Or Departments.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
28. A Value Chain Framework Ignores Customers And Suppliers As It Requires The
Organisation To Focus On Its Internal Processes.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
1.8
, 29. Value Chain Analysis Can Be Used In Conjunction With Other Management
Accounting Developments Such As Activity-Based Costing And Strategic Cost
Management.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
30. Value Chain Analysis Can Be Used To Inform Decision Such As Outsourcing And
Strategic Alliances.
*A. True
B. False
Correct Answer: A
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
32. Supply Chain Analysis Is Incompatible With Value Chain Analysis As Supply Chain
Is Only Concerned With External Suppliers.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
33. Research And Development Would Be Considered A Downstream Activity In Value
Chain Analysis.
a. True
*B. False
Correct Answer: B
Learning Objective 1.4 ~ Describe The Value Chain Framework And Its Applications In
Management Accounting
1.9
