, Chapter 01
Managerial Accounting Concepts and Principles
True / False Questions
1. Much of managerial accounting is directed at gathering useful information about costs for
planning and control decisions.
True False
2. Control is the process of setting goals and determining ways to achieve them.
True False
3. Managerial accounting is an activity that provides financial and nonfinancial information to
an organization's managers and other internal decision makers.
True False
4. One of the usual differences between financial and managerial accounting is the time
dimension of the information reported.
True False
5. Managerial accounting information can be forwarded to the managers of a company
quickly since external auditors do not have to review it, and estimates and projections are
acceptable.
True False
6. One difference between financial and managerial accounting is that the external users that
use financial information must plan a company's future, but the internal users of managerial
accounting information generally must decide whether to invest in or lend to a company.
True False
1-1
,7. Financial accounting relies on accepted principles that are enforced through an extensive
set of rules and guidelines; on the other hand, managerial accounting systems are flexible.
True False
8. The focus of financial accounting is on an organization's projects, processes, and
subdivisions, and the focus of managerial accounting is on the whole organization.
True False
9. Both financial and managerial accounting report monetary information; managerial
accounting also reports considerable nonmonetary information.
True False
10. Both financial and managerial accounting affect people's decisions and actions.
True False
11. The concept of total quality management focuses on continuous improvement.
True False
12. The orientation of just-in-time manufacturing is that products are "pulled" through the
manufacturing process by the orders received from customers.
True False
13. When the attitude of continuous improvement exists throughout an organization, every
manager and employee seeks to continuously experiment with new and improved business
practices.
True False
1-2
, 14. The main principle of the lean business model is the elimination of waste of every kind
while satisfying the customer and providing a positive return to the company.
True False
15. The management concept of customer orientation causes a company to spend large
amounts on advertising to convince customers to buy the company's standard products.
True False
16. The management concept of customer orientation encourages a company to set up its
production system to produce large quantities of the same product for all customers.
True False
17. Total quality management and just-in-time manufacturing are two modern systems
designed to improve the quality of management and the products and services offered.
True False
18. Under a just-in-time manufacturing system, large quantities of inventory are accumulated
throughout the factory to be certain that needed components are available each time that they
are needed.
True False
19. The balanced scorecard aids in continuous improvement by augmenting financial
measures with drivers or indicators of future financial performance.
True False
20. The Lean Business Model should have no effect on cost in a modern manufacturing
environment.
True False
1-3
Managerial Accounting Concepts and Principles
True / False Questions
1. Much of managerial accounting is directed at gathering useful information about costs for
planning and control decisions.
True False
2. Control is the process of setting goals and determining ways to achieve them.
True False
3. Managerial accounting is an activity that provides financial and nonfinancial information to
an organization's managers and other internal decision makers.
True False
4. One of the usual differences between financial and managerial accounting is the time
dimension of the information reported.
True False
5. Managerial accounting information can be forwarded to the managers of a company
quickly since external auditors do not have to review it, and estimates and projections are
acceptable.
True False
6. One difference between financial and managerial accounting is that the external users that
use financial information must plan a company's future, but the internal users of managerial
accounting information generally must decide whether to invest in or lend to a company.
True False
1-1
,7. Financial accounting relies on accepted principles that are enforced through an extensive
set of rules and guidelines; on the other hand, managerial accounting systems are flexible.
True False
8. The focus of financial accounting is on an organization's projects, processes, and
subdivisions, and the focus of managerial accounting is on the whole organization.
True False
9. Both financial and managerial accounting report monetary information; managerial
accounting also reports considerable nonmonetary information.
True False
10. Both financial and managerial accounting affect people's decisions and actions.
True False
11. The concept of total quality management focuses on continuous improvement.
True False
12. The orientation of just-in-time manufacturing is that products are "pulled" through the
manufacturing process by the orders received from customers.
True False
13. When the attitude of continuous improvement exists throughout an organization, every
manager and employee seeks to continuously experiment with new and improved business
practices.
True False
1-2
, 14. The main principle of the lean business model is the elimination of waste of every kind
while satisfying the customer and providing a positive return to the company.
True False
15. The management concept of customer orientation causes a company to spend large
amounts on advertising to convince customers to buy the company's standard products.
True False
16. The management concept of customer orientation encourages a company to set up its
production system to produce large quantities of the same product for all customers.
True False
17. Total quality management and just-in-time manufacturing are two modern systems
designed to improve the quality of management and the products and services offered.
True False
18. Under a just-in-time manufacturing system, large quantities of inventory are accumulated
throughout the factory to be certain that needed components are available each time that they
are needed.
True False
19. The balanced scorecard aids in continuous improvement by augmenting financial
measures with drivers or indicators of future financial performance.
True False
20. The Lean Business Model should have no effect on cost in a modern manufacturing
environment.
True False
1-3
