, TESTBANK FOR Managerial Accounting, International Adaptation, 7th
Edition Jiambalvo
Important Notes
The file organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
⚠️Note on Answer Keys: If the answer key is not included within the chapter
questions, you will find the complete answers and solutions at the end of each
chapter.
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
, 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 C 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. 3 AP
58. 1 AN 77. 2 K 96. 2 AP 115. 3 C 134. 3 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 C 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 AN 147. 2 AP 150. 2 AP 153. 2,3 AP 156. 2,3 AP
145. 2 C 148. 2 K 151. 2,3 AP 154. 2,3 AP 157. 2,3 AN
146. 2 AP 149. 2 C 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, 7th Edition, International Adaptation
TRUE-FALSE STATEMENTS
1. Financial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for internal users of accounting information.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
2. The goal of managerial accounting is to provide information for planning, controlling, and
reporting information to shareholders.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
3. A thorough understanding of managerial accounting is essential to be an effective manager.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
4. A production cost budget provides details of planned production amounts and the cost of
resources needed for production.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
5. Budgets can be used to communicate a company’s goals to employees.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
6. Only amounts that can be expressed in dollars and cents can be used in preparing budgets.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
7. A favorable evaluation of an operation indicates that the manager of that operation is
performing adequately.
Ans: False, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
8. Performance reports are used for control purposes.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
9. Performance reports, like other managerial accounting reports, must follow GAAP.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
10. Budgets show comparisons of current period performance to the planned performance.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
11. Management by exception requires managers to investigate every difference between actual
and budgeted costs that causes profit to be less than budgeted.
,1-3 Chapter 1 Managerial Accounting in the Information Age
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
12. Decisions to reward or punish managers are part of the planning and control process.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
13. Managerial accounting is directed at internal users of accounting information.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
14. Financial accounting must follow generally accepted accounting principles, whereas
managerial accounting stresses information that is useful to managers.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
15 Managerial accounting may present more detailed information than financial accounting.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
16. Managerial accounting stresses that the information provided should be useful to decision
makers such as creditors and shareholders.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
17. Financial accounting is concerned with presenting results of past transactions, while
managerial accounting places considerable emphasis on the future.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
18. Variable costs in total increase or decrease in proportion with changes in the level of business
activity.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
19. Equipment depreciation is generally a controllable cost for a factory department supervisor.
Ans: False, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
20. Fixed cost per unit remains the same even though there is a change in the number of units
produced.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
21. Variable cost per unit remains constant when the number of units produced changes.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
,1-4 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
22. Sunk costs are never a consideration in incremental analysis.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
23. Opportunity costs are the value of benefits forgone when one alternative is selected over
another.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
24. Indirect costs are directly traceable to a product, activity, or department.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
25. Since a manager can influence noncontrollable costs, they should be considered when
evaluating a manager’s performance.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
26. Incremental analysis involves calculating the difference in revenue and difference in costs
between alternatives.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
27. The actions of a manager are influenced by the performance measures that are used to
evaluate the manager.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
28. Incremental analysis is the appropriate way to approach the solution to all business financial
decisions.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
29. A good single measure of performance for a sales force would be the ratio of sales to new
customers to total sales.
Ans: True, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
30. Costs that increase due to a special order are not considered as incremental.
Ans: False, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
31. Managerial accounting is a key provider of information that impacts the information age.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
,1-5 Chapter 1 Managerial Accounting in 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,
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
33. One aspect of the value chain involves information flows between a company and its
customers.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
34. Businesses sometimes share sales databases with suppliers so suppliers can respond more
quickly.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
35. Enterprise resource planning systems focus on managing a variety of customer interactions.
Ans: False, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
36. Enterprise resource planning systems (ERP) often support accounting, human resources, and
e-commerce, in addition to production.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
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.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
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.
Ans: False, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
39. A Customer Relationship Management System (CRM) might allow a customer to track his/her
package as it is being shipped across the country.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
40. Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain
Management (SCM).
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
41. Managers that are able to recognize all ethical dilemmas have the most profitable businesses.
Ans: False, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
,1-6 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
42. A good code of ethics eliminates potential unethical behavior.
Ans: False, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
43. The U.S. government has charged the Institute of Management Accountants with primary
responsibility for developing ethics laws that businesses must follow.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
44. The Sarbanes-Oxley Act requires that companies provide relevant managerial accounting
information to decision-makers.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
45. In most organizations, the controller is the top managerial accountant.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
46. The treasurer usually reports to the controller.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
47. The controller is responsible for preparing reports for planning and evaluating company
activities.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
48. The treasurer has custody of cash and funds invested in marketable securities.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
Answers to True-False
1 F 9 F 17 T 25 F 33 T 41 F
2 F 10 F 18 T 26 T 34 T 42 F
3 T 11 F 19 F 27 T 35 F 43 F
4 T 12 T 20 F 28 T 36 T 44 F
5 T 13 T 21 T 29 T 37 T 45 T
6 F 14 T 22 T 30 F 38 F 46 F
7 F 15 T 23 T 31 T 39 T 47 T
8 T 16 F 24 F 32 T 40 T 48 T
,1-7 Chapter 1 Managerial Accounting in the Information Age
MULTIPLE CHOICE
49. Managerial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for
A. investors and banks.
B. internal users of accounting information.
C. shareholders and creditors.
D. the Securities and Exchange Commission (SEC).
Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
50. The goal of managerial accounting is to provide information that managers need for
A. planning, control, and financial reporting.
B. control, evaluation, and financial reporting.
C. planning, control, and decision making.
D. preparing reports for external users.
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
51. The financial plans prepared by managerial accountants are referred to as
A. budgets.
B. financial statements.
C. treasurer’s reports.
D. controller’s opinions.
Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
52. Which of the following is not a reason that current period performance results may differ from
the company’s budget for that period?
A. The plan may not have been followed properly.
B. The plan may not have been well thought-out.
C. Changing circumstances may have made the plan out of date.
D. All of the above are reasons that actual results may differ from the company’s plan.
Ans: D, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
53. Which one of the following is true as it relates to the management function of control?
A. It is achieved by evaluating the performance of managers.
B. It is achieved by evaluating the operations for which a manager is responsible.
C. It is necessary only when performance is less than expected.
D. It is achieved by evaluating the performance of managers and the operations for which
they are responsible.
Ans: D, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
54. Which one of the following is the last step in the planning and control process?
A. Implement a plan.
B. Construct a plan.
C. Make decisions based on the evaluation of the results.
D. Compare actual results to the planned results.
, 1-8 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
55. Performance reports often compare current performance with
A. a competing company’s performance.
B. shareholders’ expected level of performance.
C. industry standards.
D. performance in a prior period or budgeted performance.
Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
56. When using management by exception, a difference between actual costs and budgeted costs
A. should be investigated if the amount is large.
B. indicates that the planned cost was poorly estimated.
C. indicates that the manager is doing a poor job.
D. should be ignored if it increases profit.
Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
57. Wilson Company’s managers investigate departures from the budget that appear to be
significant. What principle is being followed?
A. Small amounts do not matter
B. Management by exception
C. Incremental analysis
D. You get what you measure
Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
58. Below is a performance report that compares budgeted and actual profit of Atlanta Enterprises
for the month of June:
Budget Actual Difference
Sales $182,000 $180,000 ($2,000)
Less:
Cost of ingredients 145,000 141,000 4,000
Salaries 24,000 23,000 1,000
Controllable profit $ 13,000 $ 16,000 $ 3,000
In evaluating the department in terms of its changes in sales and expenses, what will be most
important to investigate?
A. Sales
B. Cost of ingredients
C. Salaries
D. Debtors
Ans: B, LO: 1, Bloom: AN, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
59. Managerial accounting
A. is primarily directed at external users of accounting information.
B. is required by taxing authorities such as the IRS.
C. must follow GAAP.
Edition Jiambalvo
Important Notes
The file organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
⚠️Note on Answer Keys: If the answer key is not included within the chapter
questions, you will find the complete answers and solutions at the end of each
chapter.
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
, 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 C 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. 3 AP
58. 1 AN 77. 2 K 96. 2 AP 115. 3 C 134. 3 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 C 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 AN 147. 2 AP 150. 2 AP 153. 2,3 AP 156. 2,3 AP
145. 2 C 148. 2 K 151. 2,3 AP 154. 2,3 AP 157. 2,3 AN
146. 2 AP 149. 2 C 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, 7th Edition, International Adaptation
TRUE-FALSE STATEMENTS
1. Financial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for internal users of accounting information.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
2. The goal of managerial accounting is to provide information for planning, controlling, and
reporting information to shareholders.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
3. A thorough understanding of managerial accounting is essential to be an effective manager.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
4. A production cost budget provides details of planned production amounts and the cost of
resources needed for production.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
5. Budgets can be used to communicate a company’s goals to employees.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
6. Only amounts that can be expressed in dollars and cents can be used in preparing budgets.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
7. A favorable evaluation of an operation indicates that the manager of that operation is
performing adequately.
Ans: False, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
8. Performance reports are used for control purposes.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
9. Performance reports, like other managerial accounting reports, must follow GAAP.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
10. Budgets show comparisons of current period performance to the planned performance.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
11. Management by exception requires managers to investigate every difference between actual
and budgeted costs that causes profit to be less than budgeted.
,1-3 Chapter 1 Managerial Accounting in the Information Age
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
12. Decisions to reward or punish managers are part of the planning and control process.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
13. Managerial accounting is directed at internal users of accounting information.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
14. Financial accounting must follow generally accepted accounting principles, whereas
managerial accounting stresses information that is useful to managers.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
15 Managerial accounting may present more detailed information than financial accounting.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
16. Managerial accounting stresses that the information provided should be useful to decision
makers such as creditors and shareholders.
Ans: False, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
17. Financial accounting is concerned with presenting results of past transactions, while
managerial accounting places considerable emphasis on the future.
Ans: True, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
18. Variable costs in total increase or decrease in proportion with changes in the level of business
activity.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
19. Equipment depreciation is generally a controllable cost for a factory department supervisor.
Ans: False, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
20. Fixed cost per unit remains the same even though there is a change in the number of units
produced.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
21. Variable cost per unit remains constant when the number of units produced changes.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
,1-4 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
22. Sunk costs are never a consideration in incremental analysis.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
23. Opportunity costs are the value of benefits forgone when one alternative is selected over
another.
Ans: True, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
24. Indirect costs are directly traceable to a product, activity, or department.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
25. Since a manager can influence noncontrollable costs, they should be considered when
evaluating a manager’s performance.
Ans: False, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Cost Management
26. Incremental analysis involves calculating the difference in revenue and difference in costs
between alternatives.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
27. The actions of a manager are influenced by the performance measures that are used to
evaluate the manager.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
28. Incremental analysis is the appropriate way to approach the solution to all business financial
decisions.
Ans: True, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
29. A good single measure of performance for a sales force would be the ratio of sales to new
customers to total sales.
Ans: True, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
30. Costs that increase due to a special order are not considered as incremental.
Ans: False, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Decision Analysis
31. Managerial accounting is a key provider of information that impacts the information age.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
,1-5 Chapter 1 Managerial Accounting in 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,
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
33. One aspect of the value chain involves information flows between a company and its
customers.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
34. Businesses sometimes share sales databases with suppliers so suppliers can respond more
quickly.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
35. Enterprise resource planning systems focus on managing a variety of customer interactions.
Ans: False, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
36. Enterprise resource planning systems (ERP) often support accounting, human resources, and
e-commerce, in addition to production.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
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.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
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.
Ans: False, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
39. A Customer Relationship Management System (CRM) might allow a customer to track his/her
package as it is being shipped across the country.
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
40. Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain
Management (SCM).
Ans: True, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Information Management
41. Managers that are able to recognize all ethical dilemmas have the most profitable businesses.
Ans: False, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
,1-6 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
42. A good code of ethics eliminates potential unethical behavior.
Ans: False, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
43. The U.S. government has charged the Institute of Management Accountants with primary
responsibility for developing ethics laws that businesses must follow.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
44. The Sarbanes-Oxley Act requires that companies provide relevant managerial accounting
information to decision-makers.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Ethical Conduct, IMA: Business Applications
45. In most organizations, the controller is the top managerial accountant.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
46. The treasurer usually reports to the controller.
Ans: False, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
47. The controller is responsible for preparing reports for planning and evaluating company
activities.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
48. The treasurer has custody of cash and funds invested in marketable securities.
Ans: True, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Measurement Analysis and
Interpretation, AICPA PC: Decision Making, IMA: Business Applications
Answers to True-False
1 F 9 F 17 T 25 F 33 T 41 F
2 F 10 F 18 T 26 T 34 T 42 F
3 T 11 F 19 F 27 T 35 F 43 F
4 T 12 T 20 F 28 T 36 T 44 F
5 T 13 T 21 T 29 T 37 T 45 T
6 F 14 T 22 T 30 F 38 F 46 F
7 F 15 T 23 T 31 T 39 T 47 T
8 T 16 F 24 F 32 T 40 T 48 T
,1-7 Chapter 1 Managerial Accounting in the Information Age
MULTIPLE CHOICE
49. Managerial accounting stresses accounting concepts and procedures that are relevant to
preparing reports for
A. investors and banks.
B. internal users of accounting information.
C. shareholders and creditors.
D. the Securities and Exchange Commission (SEC).
Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
50. The goal of managerial accounting is to provide information that managers need for
A. planning, control, and financial reporting.
B. control, evaluation, and financial reporting.
C. planning, control, and decision making.
D. preparing reports for external users.
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
51. The financial plans prepared by managerial accountants are referred to as
A. budgets.
B. financial statements.
C. treasurer’s reports.
D. controller’s opinions.
Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
52. Which of the following is not a reason that current period performance results may differ from
the company’s budget for that period?
A. The plan may not have been followed properly.
B. The plan may not have been well thought-out.
C. Changing circumstances may have made the plan out of date.
D. All of the above are reasons that actual results may differ from the company’s plan.
Ans: D, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
53. Which one of the following is true as it relates to the management function of control?
A. It is achieved by evaluating the performance of managers.
B. It is achieved by evaluating the operations for which a manager is responsible.
C. It is necessary only when performance is less than expected.
D. It is achieved by evaluating the performance of managers and the operations for which
they are responsible.
Ans: D, LO: 1, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
54. Which one of the following is the last step in the planning and control process?
A. Implement a plan.
B. Construct a plan.
C. Make decisions based on the evaluation of the results.
D. Compare actual results to the planned results.
, 1-8 Test Bank to accompany Jiambalvo Managerial Accounting, 7th Edition, International Adaptation
Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
55. Performance reports often compare current performance with
A. a competing company’s performance.
B. shareholders’ expected level of performance.
C. industry standards.
D. performance in a prior period or budgeted performance.
Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
56. When using management by exception, a difference between actual costs and budgeted costs
A. should be investigated if the amount is large.
B. indicates that the planned cost was poorly estimated.
C. indicates that the manager is doing a poor job.
D. should be ignored if it increases profit.
Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
57. Wilson Company’s managers investigate departures from the budget that appear to be
significant. What principle is being followed?
A. Small amounts do not matter
B. Management by exception
C. Incremental analysis
D. You get what you measure
Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC: Communication,
IMA: Reporting
58. Below is a performance report that compares budgeted and actual profit of Atlanta Enterprises
for the month of June:
Budget Actual Difference
Sales $182,000 $180,000 ($2,000)
Less:
Cost of ingredients 145,000 141,000 4,000
Salaries 24,000 23,000 1,000
Controllable profit $ 13,000 $ 16,000 $ 3,000
In evaluating the department in terms of its changes in sales and expenses, what will be most
important to investigate?
A. Sales
B. Cost of ingredients
C. Salaries
D. Debtors
Ans: B, LO: 1, Bloom: AN, Difficulty: Moderate, Min: 1, AACSB: Analytic, AICPA FN: Reporting, AICPA PC:
Communication, IMA: Reporting
59. Managerial accounting
A. is primarily directed at external users of accounting information.
B. is required by taxing authorities such as the IRS.
C. must follow GAAP.
