,Chapter 01 - Managerial Accounting and the Business Environment
Chapter 01
Managerial Accounting and the Business Environment
Multiple Choice Questions
1. Day-to-day decision making is most common to which of the following activities managers
are expected to carry on in organizations?
A. Strategy formulation.
B. Directing and motivating.
C. Planning.
D. Budgeting.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Medium
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-02 The Work of Managers and Their Need for Managerial Accounting Information
2. Identifying alternatives and selecting the best among them is part of which of the following
activities which managers carry on in organizations?
A. Controlling.
B. Directing.
C. Planning.
D. Motivating.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Medium
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-03 Planning
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,Chapter 01 - Managerial Accounting and the Business Environment
3. Budgeting is part of which of the following activities managers perform in organizations?
A. Controlling.
B. Directing.
C. Planning.
D. Motivating.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-03 Planning
4. Obtaining feedback is generally identified most directly with which of these functions of
management?
A. Planning.
B. Directing and motivating.
C. Controlling.
D. Decision making.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-05 Controlling
5. Which of the following is part of managing and improving business processes?
A. Directing
B. Lean production
C. Motivating
D. Planning
Blooms: Remember
CPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.
Difficulty: Easy
Learning Objective: 01-03 Explain the basic concepts of lean production and enterprise risk management.
Topic: 01-16 Business Process Management
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, Chapter 01 - Managerial Accounting and the Business Environment
6. Which is the most common risk management tactic?
A. Accept the risk.
B. Avoid the risk.
C. Reduce the risk.
D. Share the risk.
Blooms: Remember
CPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.
Difficulty: Easy
Learning Objective: 01-03 Explain the basic concepts of lean production and enterprise risk management.
Topic: 01-18 Enterprise Risk Management
7. Which of the following best describes the function of managerial accounting within an
organization?
A. It has its primary emphasis on the future.
B. It is required by regulatory bodies such as the Ontario Securities Commission.
C. It focuses on the organization as a whole, rather than on the organization's segments.
D. It places more emphasis on precision of data than financial accounting does.
Blooms: Remember
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.
Topic: 01-10 Emphasis on the Future
8. Upon which of the following does managerial accounting place considerable weight?
A. Generally accepted accounting principles.
B. The financial history of the entity.
C. Ensuring that all transactions are properly recorded.
D. Detailed segment reports about departments, products, and customers.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.
Topic: 01-13 Segments of an Organization
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Chapter 01
Managerial Accounting and the Business Environment
Multiple Choice Questions
1. Day-to-day decision making is most common to which of the following activities managers
are expected to carry on in organizations?
A. Strategy formulation.
B. Directing and motivating.
C. Planning.
D. Budgeting.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Medium
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-02 The Work of Managers and Their Need for Managerial Accounting Information
2. Identifying alternatives and selecting the best among them is part of which of the following
activities which managers carry on in organizations?
A. Controlling.
B. Directing.
C. Planning.
D. Motivating.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Medium
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-03 Planning
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,Chapter 01 - Managerial Accounting and the Business Environment
3. Budgeting is part of which of the following activities managers perform in organizations?
A. Controlling.
B. Directing.
C. Planning.
D. Motivating.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-03 Planning
4. Obtaining feedback is generally identified most directly with which of these functions of
management?
A. Planning.
B. Directing and motivating.
C. Controlling.
D. Decision making.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-01 Describe the functions performed by managers.
Topic: 01-05 Controlling
5. Which of the following is part of managing and improving business processes?
A. Directing
B. Lean production
C. Motivating
D. Planning
Blooms: Remember
CPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.
Difficulty: Easy
Learning Objective: 01-03 Explain the basic concepts of lean production and enterprise risk management.
Topic: 01-16 Business Process Management
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, Chapter 01 - Managerial Accounting and the Business Environment
6. Which is the most common risk management tactic?
A. Accept the risk.
B. Avoid the risk.
C. Reduce the risk.
D. Share the risk.
Blooms: Remember
CPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.
Difficulty: Easy
Learning Objective: 01-03 Explain the basic concepts of lean production and enterprise risk management.
Topic: 01-18 Enterprise Risk Management
7. Which of the following best describes the function of managerial accounting within an
organization?
A. It has its primary emphasis on the future.
B. It is required by regulatory bodies such as the Ontario Securities Commission.
C. It focuses on the organization as a whole, rather than on the organization's segments.
D. It places more emphasis on precision of data than financial accounting does.
Blooms: Remember
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.
Topic: 01-10 Emphasis on the Future
8. Upon which of the following does managerial accounting place considerable weight?
A. Generally accepted accounting principles.
B. The financial history of the entity.
C. Ensuring that all transactions are properly recorded.
D. Detailed segment reports about departments, products, and customers.
Blooms: Understand
CPA Competency: 3.1.1 Evaluates management information requirements.
Difficulty: Easy
Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.
Topic: 01-13 Segments of an Organization
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
