,OpenStax Principles of Accounting, Volume 2: Managerial Accounting
Chapter 1: Accounting as a Tool for Managers
Principles of Accounting, Volume 2: Managerial Accounting
Chapter 1: Accounting as a Tool for Managers
Multiple Choice
1. LO 1.1 The managers of an organization are responsible for performing several broad
functions. They are ________.
A. planning, controlling, and selling
B. directing, controlling, and evaluating
C. planning, evaluating, and manufacturing
D. planning, controlling, and evaluating
Solution
D
2. LO 1.1 Management accountants help the management of an organization in their planning
function through ________.
A. monitoring anti-theft systems
B. strategic planning
C. evaluating costs
D. analyzing profits
Solution
B
3. LO 1.1 Which of the following is a primary aspect of the evaluating function within an
organization?
A. comparing actual results against expected results for products, departments, divisions, or
the company as a whole
B. reviewing only the quantitative or financial results of the company
C. setting goals
D. putting controls in place for the upcoming year
Solution
A
4. LO 1.1 During the control function, the measurements taken of the performance must be
accurate enough to see ________.
A. only positive results
B. deviations and variances
C. the primary focus
D. only the negative results
Solution
B
5. LO 1.1 Which of the following is false regarding strategic planning?
A. It is the sole responsibility of supervisors.
B. It will span many years.
C. It should include both short-term and long-term goals.
D. Strategic objectives will be diverse and vary from company to company.
Solution
A
6. LO 1.2 Managerial accounting produces information:
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, OpenStax Principles of Accounting, Volume 2: Managerial Accounting
Chapter 1: Accounting as a Tool for Managers
A. to meet the needs of external users
B. that is often focused on the future
C. to meet the needs of investors
D. that follows the rules of GAAP
Solution
B
7. LO 1.2 Management accounting:
A. emphasizes special-purpose information
B. relates to the company as a whole
C. is limited to strictly cost figures
D. is controlled by GAAP
Solution
A
8. LO 1.2 Internal users of accounting information would not include ________.
A. managers
B. employees
C. creditors
D. officers
Solution
C
9. LO 1.2 External users of accounting information would include ________.
A. employees
B. managers
C. investors
D. supervisors
Solution
C
10. LO 1.2 Which of the following statements is incorrect?
A. The practice of management accounting is fairly flexible.
B. The information gathered from management accounting is not required by law.
C. Management accounting focuses mainly on the internal user.
D. Reports produced using management accounting must follow GAAP.
Solution
D
11. LO 1.3 The stockholders of a company are:
A. the owners
B. policy setters
C. responsible and liable for the financial well-being of the company
D. operating within the company as independent shareholders
Solution
A
12. LO 1.3 The controller of a corporation:
A. reports to the CFO and is in charge of the finance side of the business
B. reports to the CFO and is in charge of the accounting side of the business
C. reports to the CEO and implements all cash policies
D. reports to the board of directors
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Chapter 1: Accounting as a Tool for Managers
Principles of Accounting, Volume 2: Managerial Accounting
Chapter 1: Accounting as a Tool for Managers
Multiple Choice
1. LO 1.1 The managers of an organization are responsible for performing several broad
functions. They are ________.
A. planning, controlling, and selling
B. directing, controlling, and evaluating
C. planning, evaluating, and manufacturing
D. planning, controlling, and evaluating
Solution
D
2. LO 1.1 Management accountants help the management of an organization in their planning
function through ________.
A. monitoring anti-theft systems
B. strategic planning
C. evaluating costs
D. analyzing profits
Solution
B
3. LO 1.1 Which of the following is a primary aspect of the evaluating function within an
organization?
A. comparing actual results against expected results for products, departments, divisions, or
the company as a whole
B. reviewing only the quantitative or financial results of the company
C. setting goals
D. putting controls in place for the upcoming year
Solution
A
4. LO 1.1 During the control function, the measurements taken of the performance must be
accurate enough to see ________.
A. only positive results
B. deviations and variances
C. the primary focus
D. only the negative results
Solution
B
5. LO 1.1 Which of the following is false regarding strategic planning?
A. It is the sole responsibility of supervisors.
B. It will span many years.
C. It should include both short-term and long-term goals.
D. Strategic objectives will be diverse and vary from company to company.
Solution
A
6. LO 1.2 Managerial accounting produces information:
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, OpenStax Principles of Accounting, Volume 2: Managerial Accounting
Chapter 1: Accounting as a Tool for Managers
A. to meet the needs of external users
B. that is often focused on the future
C. to meet the needs of investors
D. that follows the rules of GAAP
Solution
B
7. LO 1.2 Management accounting:
A. emphasizes special-purpose information
B. relates to the company as a whole
C. is limited to strictly cost figures
D. is controlled by GAAP
Solution
A
8. LO 1.2 Internal users of accounting information would not include ________.
A. managers
B. employees
C. creditors
D. officers
Solution
C
9. LO 1.2 External users of accounting information would include ________.
A. employees
B. managers
C. investors
D. supervisors
Solution
C
10. LO 1.2 Which of the following statements is incorrect?
A. The practice of management accounting is fairly flexible.
B. The information gathered from management accounting is not required by law.
C. Management accounting focuses mainly on the internal user.
D. Reports produced using management accounting must follow GAAP.
Solution
D
11. LO 1.3 The stockholders of a company are:
A. the owners
B. policy setters
C. responsible and liable for the financial well-being of the company
D. operating within the company as independent shareholders
Solution
A
12. LO 1.3 The controller of a corporation:
A. reports to the CFO and is in charge of the finance side of the business
B. reports to the CFO and is in charge of the accounting side of the business
C. reports to the CEO and implements all cash policies
D. reports to the board of directors
Page 2 of 22
