Managerial Accounting (4th Edition) – Elizabeth Davis & Charles E. Davis – Test Bank (Chapters 1–13) with Multiple Choice Questions and Verified Answers

1-1 TestBankforDavis&Davis,Managerial Accounting,4/e
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, 1-2 TestBank forDavis&Davis,Managerial Accounting,4/e
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TableOfContents




1. Accountingas a Toolfor Management
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2. CostBehaviorandCost Estimation s ss




3. Cost-Volume-ProfitAnalysisandPricingDecisions s




4. ProductCosts andJobOrderCosting
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5. Planning andForecasting
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5A: Planning andForecasting ina Retail Setting*(online only)
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6. PerformanceEvaluation:Variance Analysis
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7. Activity-BasedCostingandActivity-BasedManagement s




8. UsingAccountingInformationtoMakeManagerialDecisions
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9. CapitalBudgeting


10. Decentralizationand Performance Evaluation ss ss




11. PerformanceEvaluationRevisited:ABalancedApproach s




12. FinancialStatementAnalysis


13. StatementofCashFlows




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, 1-3 TestBank forDavis&Davis,Managerial Accounting,4/e
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Chapter 1 ss




ss Accounting as aTool forManagement ss ss s ss




CHAPTER LEARNINGOBJECTIVES ss




1. Definemanagerialaccounting (Unit1.1) ss s




There are several formal definitions of managerial accounting. A simple one is
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ss “thegeneration of relevant information to support management’s decision- ss ss ss ss ss ss ss




ss making activities.” ss




2. Describethedifferencesbetweenmanagerialandfinancial accounting(Unit 1.1) s s ss ss




ss Managerialaccounting’s primaryusersaremanagers anddecisionmakerswithin an ss s ss




ss organization, whereas financial accounting is aimed primarily at external users. Unlike
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ss GAAP that guides financial accounting, there are no mandated rules in managerial
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ss accounting. Managerial accounting reports focus on operating segments, while
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ss financialaccounting statements report results for the organization as a whole.
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ss Managerial accounting is concerned more with projecting future results than
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s s reporting past results. Managerial information is prepared to take advantage of a
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ss window of opportunity, evenif some accuracy must be sacrificed. Financial accounting
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information is balanced to the ss ss ss ss s s penny and is delivered after the end of the ss ss ss ss ss ss ss ss




ss accounting period. ss




3. List and describe the four functions of managers (Unit 1.1) Planning means setting a
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ss direction for the organization. Long-term, or strategic planningprovides direction for
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s s a five- to ten-year period. Short-term or operational planning provides more
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ss detailed guidance for the coming year; it translates thecompany’sstrategyinto
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actionsteps. Controlling isthe monitoring of day-to-day operations to identify any
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ss problems that require corrective action. Evaluating is the process of comparing a
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ss particular period’s actual results to plannedresults,forthepurpose of
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ss assessingmanagerialperformance. Decision making means choosing between ss ss ss ss ss




ss alternative courses of action. ss ss ss




4. Explainhowtheselectionofaparticular businessstrategy determines s ss ss




ss theinformation that managers need to run an organization effectively ss ss ss ss ss ss ss ss




ss (Unit 1.2) ss




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, 1-4 TestBank forDavis&Davis,Managerial Accounting,4/e
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To run a business effectively, managers need information that shows how well
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ss operations aremeeting theorganization’sstrategic goals. Forinstance,if the
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ss organization’s strategy is to be a low-cost producer, information about product
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ss costsand cost variances will be more useful to managers than information about
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ss researchand development. ss




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