, CHAPTER 1
Managerial Accounting in the Information Age
Summary of Questions by Objectives and Bloom’s Taxonomy
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
True-False Statements
1. 1 K 11. 1 K 21. 2 K 31. 4 K 41. 5 C
2. 1 K 12. 1 K 22. 2 K 32. 4 K 42. 5 K
3. 1 K 13. 1 K 23. 2 K 33. 4 K 43. 5 K
4. 1 K 14. 1 K 24. 2 K 34. 4 K 44. 5 K
5. 1 K 15. 1 K 25. 2 K 35. 4 K 45. 5 K
6. 1 K 16. 1 K 26. 3 K 36. 4 K 46. 5 K
7. 1 C 17. 1 K 27. 3 K 37. 4 K 47. 5 K
8. 1 K 18. 2 K 28. 3 K 38. 4 K 48. 5 K
9. 1 K 19. 2 K 29. 3 C 39. 4 K
10. 1 K 20. 2 K 30. 3 K 40. 4 K
Multiple Choice Questions
49. 1 K 68. 2 C 87. 2 AP 106. 3 K 125. 5 K
50. 1 K 69. 2 K 88. 2 AP 107. 3 C 126. 5 K
51. 1 K 70. 2 K 89. 2 AP 108. 3 C 127. 5 K
52. 1 C 71. 2 K 90. 2 AP 109. 3 AP 128. 2 AP
53. 1 C 72. 2 K 91. 2 K 110. 3 AP 129. 2 AP
54. 1 K 73. 2 K 92. 2 AP 111. 3 AP 130. 2 AP
55. 1 K 74. 2 K 93. 2 AP 112. 3 AP 131. 2 AP
56. 1 K 75. 2 C 94. 2 AP 113. 3 AP 132. 2 AP
57. 1 K 76. 2 C 95. 2 AP 114. 3 AP 133. 2 AP
58. 1 K 77. 2 K 96. 2 AP 115. 3 K 134. 2 AP
59. 1 K 78. 2 K 97. 2 Ap 116. 4 K 135. 3 AP
60. 1 K 79. 2 C 98. 2 AP 117. 4 K 136. 3 AP
61. 1 K 80. 2 C 99. 3 AP 118. 4 K 137. 2 AP
62. 1 K 81. 2 K 100. 3 AP 119. 5 K 138. 2 AP
63. 2 K 82. 2 AP 101. 3 AP 120. 5 K 139. 2 AP
64. 2 K 83. 2 AP 102. 3 K 121. 5 K 140. 2 AP
65. 2 AP 84. 2 AP 103. 3 K 122. 5 K 141. 2 AP
66. 2 C 85. 2 AP 104. 3 K 123. 5 K 142. 2 AP
67. 2 C 86. 2 AP 105. 3 K 124. 5 K
Matching
143. 1,2,3,4 K
7,7 Exercises
144. 1 K 147. 2 AP 150. 2 AP 153. 2,3 AP 156. 2,3 AP
145. 2 K 148. 2 K 151. 2,3 AP 154. 2,3 AP 157. 2,3 AN
146. 2 AP 149. 2 K 152. 2 AP 155. 1,2 AP 158. 2,3 AN
Challenge Exercises
159. 2,3 AN 160. 2,3 AN
Short-Answer Essays
161. 1 K 163. 1 C 165. 3 C 167. 4 C
162. 1 K 164. 2 C 166. 3 C
,1-2 Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
TRUE-FALSE STATEMENTS
1. Financial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for internal users of accounting information.
2. The goal of managerial accounting is to provide information for planning, controlling, and
reporting information to shareholders.
3. A thorough understanding of managerial accounting is essential to be an effective manager.
4. A production cost budget provides details of planned production amounts and the cost of
resources needed for production.
5. Budgets can be used to communicate a company’s goals to employees.
6. Only amounts that can be expressed in dollars and cents can be used in preparing budgets.
7. A favorable evaluation of an operation indicates that the manager of that operation is
performing adequately.
8. Performance reports are used for control purposes.
9. Performance reports, like other managerial accounting reports, must follow GAAP.
10. Budgets show comparisons of current period performance to the planned performance.
11. Management by exception requires managers to investigate every difference between actual
and budgeted costs that causes profit to be less than budgeted.
12. Decisions to reward or punish managers are part of the planning and control process.
13. Managerial accounting is directed at internal users of accounting information.
14. Financial accounting must follow generally accepted accounting principles, whereas
managerial accounting stresses information that is useful to managers.
15 Managerial accounting may present more detailed information than financial accounting.
16. Managerial accounting stresses that the information provided should be useful to decision
makers such as creditors and shareholders.
17. Financial accounting is concerned with presenting results of past transactions, while
managerial accounting places considerable emphasis on the future.
18. Variable costs in total increase or decrease in proportion with changes in the level of business
activity.
19. Equipment depreciation is generally a controllable cost for a factory department supervisor.
20. Fixed cost per unit remains the same even though there is a change in the number of units
produced.
21. Variable cost per unit remains constant when the number of units produced changes.
, Chapter 1 Managerial Accounting in the Information Age 1-3
22. Sunk costs are never a consideration in incremental analysis.
23. Opportunity costs are the value of benefits forgone when one alternative is selected over
another.
24. Indirect costs are directly traceable to a product, activity, or department.
25. Since a manager can influence noncontrollable costs, they should be considered when
evaluating a manager’s performance.
26. Incremental analysis involves calculating the difference in revenue and difference in costs
between alternatives.
27. The actions of a manager are influenced by the performance measures that are used to
evaluate the manager.
28. Incremental analysis is the appropriate way to approach the solution to all business problems.
29. A good single measure of performance for a sales force would be the ratio of sales to new
customers to total sales.
30. Costs that increase due to a special order are not considered as incremental.
31. Managerial accounting is a key provider of information that impacts the information age.
32. Firm value is created when the value to the customer of receiving products and services
exceeds the cost of these activities,
33. One aspect of the value chain involves information flows between a company and its
customers.
34. Businesses sometimes share sales databases with suppliers so suppliers can respond more
quickly.
35. Enterprise resource planning systems focus on managing a variety of customer interactions.
36. Enterprise resource planning systems (ERP) often support accounting, human resources, and
e-commerce, in addition to production.
37. Supply chain management systems (SCM) allow suppliers some access to a company’s
databases so goods can more profitably be delivered to a company’s customers.
38. Customer Relationship Management Systems (CRM) involve activities between companies
and its suppliers in an effort to enhance production and delivery of goods to customers.
39. A Customer Relationship Management System (CRM) might allow a customer to track his/her
package as it is being shipped across the country.
40. Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain
Management (SCM).
41. Managers that are able to recognize all ethical dilemmas have the most profitable businesses.
Managerial Accounting in the Information Age
Summary of Questions by Objectives and Bloom’s Taxonomy
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
True-False Statements
1. 1 K 11. 1 K 21. 2 K 31. 4 K 41. 5 C
2. 1 K 12. 1 K 22. 2 K 32. 4 K 42. 5 K
3. 1 K 13. 1 K 23. 2 K 33. 4 K 43. 5 K
4. 1 K 14. 1 K 24. 2 K 34. 4 K 44. 5 K
5. 1 K 15. 1 K 25. 2 K 35. 4 K 45. 5 K
6. 1 K 16. 1 K 26. 3 K 36. 4 K 46. 5 K
7. 1 C 17. 1 K 27. 3 K 37. 4 K 47. 5 K
8. 1 K 18. 2 K 28. 3 K 38. 4 K 48. 5 K
9. 1 K 19. 2 K 29. 3 C 39. 4 K
10. 1 K 20. 2 K 30. 3 K 40. 4 K
Multiple Choice Questions
49. 1 K 68. 2 C 87. 2 AP 106. 3 K 125. 5 K
50. 1 K 69. 2 K 88. 2 AP 107. 3 C 126. 5 K
51. 1 K 70. 2 K 89. 2 AP 108. 3 C 127. 5 K
52. 1 C 71. 2 K 90. 2 AP 109. 3 AP 128. 2 AP
53. 1 C 72. 2 K 91. 2 K 110. 3 AP 129. 2 AP
54. 1 K 73. 2 K 92. 2 AP 111. 3 AP 130. 2 AP
55. 1 K 74. 2 K 93. 2 AP 112. 3 AP 131. 2 AP
56. 1 K 75. 2 C 94. 2 AP 113. 3 AP 132. 2 AP
57. 1 K 76. 2 C 95. 2 AP 114. 3 AP 133. 2 AP
58. 1 K 77. 2 K 96. 2 AP 115. 3 K 134. 2 AP
59. 1 K 78. 2 K 97. 2 Ap 116. 4 K 135. 3 AP
60. 1 K 79. 2 C 98. 2 AP 117. 4 K 136. 3 AP
61. 1 K 80. 2 C 99. 3 AP 118. 4 K 137. 2 AP
62. 1 K 81. 2 K 100. 3 AP 119. 5 K 138. 2 AP
63. 2 K 82. 2 AP 101. 3 AP 120. 5 K 139. 2 AP
64. 2 K 83. 2 AP 102. 3 K 121. 5 K 140. 2 AP
65. 2 AP 84. 2 AP 103. 3 K 122. 5 K 141. 2 AP
66. 2 C 85. 2 AP 104. 3 K 123. 5 K 142. 2 AP
67. 2 C 86. 2 AP 105. 3 K 124. 5 K
Matching
143. 1,2,3,4 K
7,7 Exercises
144. 1 K 147. 2 AP 150. 2 AP 153. 2,3 AP 156. 2,3 AP
145. 2 K 148. 2 K 151. 2,3 AP 154. 2,3 AP 157. 2,3 AN
146. 2 AP 149. 2 K 152. 2 AP 155. 1,2 AP 158. 2,3 AN
Challenge Exercises
159. 2,3 AN 160. 2,3 AN
Short-Answer Essays
161. 1 K 163. 1 C 165. 3 C 167. 4 C
162. 1 K 164. 2 C 166. 3 C
,1-2 Test Bank to accompany Jiambalvo Managerial Accounting, 6th Edition
TRUE-FALSE STATEMENTS
1. Financial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for internal users of accounting information.
2. The goal of managerial accounting is to provide information for planning, controlling, and
reporting information to shareholders.
3. A thorough understanding of managerial accounting is essential to be an effective manager.
4. A production cost budget provides details of planned production amounts and the cost of
resources needed for production.
5. Budgets can be used to communicate a company’s goals to employees.
6. Only amounts that can be expressed in dollars and cents can be used in preparing budgets.
7. A favorable evaluation of an operation indicates that the manager of that operation is
performing adequately.
8. Performance reports are used for control purposes.
9. Performance reports, like other managerial accounting reports, must follow GAAP.
10. Budgets show comparisons of current period performance to the planned performance.
11. Management by exception requires managers to investigate every difference between actual
and budgeted costs that causes profit to be less than budgeted.
12. Decisions to reward or punish managers are part of the planning and control process.
13. Managerial accounting is directed at internal users of accounting information.
14. Financial accounting must follow generally accepted accounting principles, whereas
managerial accounting stresses information that is useful to managers.
15 Managerial accounting may present more detailed information than financial accounting.
16. Managerial accounting stresses that the information provided should be useful to decision
makers such as creditors and shareholders.
17. Financial accounting is concerned with presenting results of past transactions, while
managerial accounting places considerable emphasis on the future.
18. Variable costs in total increase or decrease in proportion with changes in the level of business
activity.
19. Equipment depreciation is generally a controllable cost for a factory department supervisor.
20. Fixed cost per unit remains the same even though there is a change in the number of units
produced.
21. Variable cost per unit remains constant when the number of units produced changes.
, Chapter 1 Managerial Accounting in the Information Age 1-3
22. Sunk costs are never a consideration in incremental analysis.
23. Opportunity costs are the value of benefits forgone when one alternative is selected over
another.
24. Indirect costs are directly traceable to a product, activity, or department.
25. Since a manager can influence noncontrollable costs, they should be considered when
evaluating a manager’s performance.
26. Incremental analysis involves calculating the difference in revenue and difference in costs
between alternatives.
27. The actions of a manager are influenced by the performance measures that are used to
evaluate the manager.
28. Incremental analysis is the appropriate way to approach the solution to all business problems.
29. A good single measure of performance for a sales force would be the ratio of sales to new
customers to total sales.
30. Costs that increase due to a special order are not considered as incremental.
31. Managerial accounting is a key provider of information that impacts the information age.
32. Firm value is created when the value to the customer of receiving products and services
exceeds the cost of these activities,
33. One aspect of the value chain involves information flows between a company and its
customers.
34. Businesses sometimes share sales databases with suppliers so suppliers can respond more
quickly.
35. Enterprise resource planning systems focus on managing a variety of customer interactions.
36. Enterprise resource planning systems (ERP) often support accounting, human resources, and
e-commerce, in addition to production.
37. Supply chain management systems (SCM) allow suppliers some access to a company’s
databases so goods can more profitably be delivered to a company’s customers.
38. Customer Relationship Management Systems (CRM) involve activities between companies
and its suppliers in an effort to enhance production and delivery of goods to customers.
39. A Customer Relationship Management System (CRM) might allow a customer to track his/her
package as it is being shipped across the country.
40. Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain
Management (SCM).
41. Managers that are able to recognize all ethical dilemmas have the most profitable businesses.
