Managerial Accounting: Making Decisions and Motivating
Performance (Datar/Rajan)
Chapter 1 The Manager and Management Accounting
Learning Objective 1-1
1) Managers use management accounting information to do all of the following
except:
A) collect.
B) analyze.
C) perform.
D) categorize.
E) summarize.
Answer: C
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-28
AACSB: Reflective Thinking Skills
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
2) Managers make cost management decisions to increase the value of products and
services they provide to customers and to achieve organizational goals. Which of the
following is not an example of an effective cost management decision?
A) The decision to enter a new market.
B) A decision to change the design of a product.
C) The decision to implement new organizational processes.
D) Information and the accounting systems themselves.
E) Decisions to use the information from accounting systems.
Answer: D
,Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-21
AACSB: Analytic Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
3) Management accounting:
A) focuses on measuring, analyzing, and reporting financial and nonfinancial
information to help managers estimate future revenue, costs, and other measures to
forecast activities and formulate strategies to increase the competitive advantage of
the organization.
B) financial-information purpose is to communicate organization's financial position
to investors, banks, regulators, and suppliers.
C) focus and emphasis is on past-oriented reports.
D) rules of measurement reporting require financial statements to be prepared in
accordance of GAAP.
E) behavioral information primarily reports economic events, but also influences
behavior because manager's compensation is often based on reported financial data.
Answer: A
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-21
AACSB: Analytic Skills
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
4) Financial accounting:
A) focuses on reporting financial information to managers of the organization.
B) financial statements must comply with Generally Accepted Accounting Principles
(GAAP).
C) focus and emphasis is on future-oriented reports.
D) rules of measurement are internal measures and reports do not have to follow
GAAP, but are based on cost-benefit analysis.
,E) behavioral implications are designed primarily to influence the behavior of
managers and other employees.
Answer: B
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-1
AACSB: Reflective Thinking Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
5) An Enterprise Resource Planning (ERP) system is:
A) a cost-management system that specifically focuses on strategic issues.
B) a single database that collects data and feeds it into applications that support
each of the company's business activities, such as purchasing, production,
distribution, and sales.
C) a sequence of business functions in which customer usefulness is added to
products.
D) a strategy that integrates people and technology in all business functions to
deepen relationships with customers, partners, and distributors.
E) an integrated philosophy of management for continuously improving the quality
of products and processes.
Answer: B
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-15
AACSB: Use of Information Technology
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
6) Users of management accounting information include:
A) banks.
B) investors.
, C) suppliers.
D) regulators.
E) managers of the organization.
Answer: E
Diff: 1 Page Ref: 3
LO: 1-1
EOC: E1-7
AACSB: Analytic Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
Performance (Datar/Rajan)
Chapter 1 The Manager and Management Accounting
Learning Objective 1-1
1) Managers use management accounting information to do all of the following
except:
A) collect.
B) analyze.
C) perform.
D) categorize.
E) summarize.
Answer: C
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-28
AACSB: Reflective Thinking Skills
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
2) Managers make cost management decisions to increase the value of products and
services they provide to customers and to achieve organizational goals. Which of the
following is not an example of an effective cost management decision?
A) The decision to enter a new market.
B) A decision to change the design of a product.
C) The decision to implement new organizational processes.
D) Information and the accounting systems themselves.
E) Decisions to use the information from accounting systems.
Answer: D
,Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-21
AACSB: Analytic Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
3) Management accounting:
A) focuses on measuring, analyzing, and reporting financial and nonfinancial
information to help managers estimate future revenue, costs, and other measures to
forecast activities and formulate strategies to increase the competitive advantage of
the organization.
B) financial-information purpose is to communicate organization's financial position
to investors, banks, regulators, and suppliers.
C) focus and emphasis is on past-oriented reports.
D) rules of measurement reporting require financial statements to be prepared in
accordance of GAAP.
E) behavioral information primarily reports economic events, but also influences
behavior because manager's compensation is often based on reported financial data.
Answer: A
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-21
AACSB: Analytic Skills
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
4) Financial accounting:
A) focuses on reporting financial information to managers of the organization.
B) financial statements must comply with Generally Accepted Accounting Principles
(GAAP).
C) focus and emphasis is on future-oriented reports.
D) rules of measurement are internal measures and reports do not have to follow
GAAP, but are based on cost-benefit analysis.
,E) behavioral implications are designed primarily to influence the behavior of
managers and other employees.
Answer: B
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-1
AACSB: Reflective Thinking Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
5) An Enterprise Resource Planning (ERP) system is:
A) a cost-management system that specifically focuses on strategic issues.
B) a single database that collects data and feeds it into applications that support
each of the company's business activities, such as purchasing, production,
distribution, and sales.
C) a sequence of business functions in which customer usefulness is added to
products.
D) a strategy that integrates people and technology in all business functions to
deepen relationships with customers, partners, and distributors.
E) an integrated philosophy of management for continuously improving the quality
of products and processes.
Answer: B
Diff: 2 Page Ref: 2
LO: 1-1
EOC: E1-15
AACSB: Use of Information Technology
Learning Outcome: MA-1: Describe the basics of managerial accounting and its function
within an organization.
6) Users of management accounting information include:
A) banks.
B) investors.
, C) suppliers.
D) regulators.
E) managers of the organization.
Answer: E
Diff: 1 Page Ref: 3
LO: 1-1
EOC: E1-7
AACSB: Analytic Skills
Learning Outcome: FA-1: Define accounting terms, accounting concepts, and principles.
