BESTLEC
Test Bank: Managerial Accounting.
by Ray H. Garrison, Theresa Libby, Alan Webb.
C
LE
ST
BE
1
, BESTLEC
True/False Questions
1. Although financial and managerial accounting differ in many ways, they are similar in
that both rely on the same underlying financial data.
Answer: True Level: Medium LO: 1
2. Managerial accounting is a branch of financial accounting and serves essentially the same
purposes as financial accounting.
Answer: False Level: Medium LO: 1
3. Managerial accounting places greater emphasis on the future than financial accounting,
C
which is primarily concerned with the past.
Answer: True Level: Easy LO: 1b
LE
4. Managerial accounting is not needed in a non-profit or governmental organization.
ST
Answer: False Level: Easy LO: 1
BE
5. When carrying out their planning activities, managers select a course of action and
specify how the action will be implemented.
Answer: True Level: Easy LO: 2
6. When carrying out their planning activities, managers obtain feedback to ensure that the
plan is actually carried out and is appropriately modified as circumstances change.
Answer: False Level: Medium LO: 2
7. The controller occupies a line position in an organization.
2
, BESTLEC
Answer: False Level: Easy LO: 2
8. Decentralization means the delegation of decision-making authority throughout an
organization by allowing managers at various operating levels to make key decisions relating to
their own area of responsibility.
Answer: True Level: Easy LO: 2
9. A firm's organization chart will normally show both the formal and informal lines of
reporting and communication.
C
Answer: False Level: Easy LO: 2
LE
10. The Chief Financial Officer of an organization is responsible for ensuring that line
ST
operations run smoothly.
Answer: False Level: Medium LO: 2
BE
11. Traditionally, companies have maintained large amounts of raw materials, work in
process, and finished goods inventories to act as buffers so that operations can proceed smoothly
even if there are unanticipated disruptions.
Answer: True Level: Medium LO: 3
12. Process Reengineering is generally considered to be a more radical approach to
improvement than Total Quality Management.
Answer: True Level: Easy LO: 3
3
, BESTLEC
13. Process Reengineering emphasizes a team approach involving front-line workers,
whereas Total Quality Management is usually implemented using outside specialists and is
imposed from above.
Answer: False Level: Medium LO: 3
14. If ethical standards were not generally followed, one of the results would probably be
fewer goods and services available in the marketplace.
Answer: True Level: Medium LO: 4
C
15. The Standards of Ethical Conduct for Management Accountants promulgated by the
Institute of Management Accountants specifically state that management accountants' sole ethical
LE
responsibility is to not break any laws.
Answer: False Level: Easy LO: 4
ST
BE
4
Test Bank: Managerial Accounting.
by Ray H. Garrison, Theresa Libby, Alan Webb.
C
LE
ST
BE
1
, BESTLEC
True/False Questions
1. Although financial and managerial accounting differ in many ways, they are similar in
that both rely on the same underlying financial data.
Answer: True Level: Medium LO: 1
2. Managerial accounting is a branch of financial accounting and serves essentially the same
purposes as financial accounting.
Answer: False Level: Medium LO: 1
3. Managerial accounting places greater emphasis on the future than financial accounting,
C
which is primarily concerned with the past.
Answer: True Level: Easy LO: 1b
LE
4. Managerial accounting is not needed in a non-profit or governmental organization.
ST
Answer: False Level: Easy LO: 1
BE
5. When carrying out their planning activities, managers select a course of action and
specify how the action will be implemented.
Answer: True Level: Easy LO: 2
6. When carrying out their planning activities, managers obtain feedback to ensure that the
plan is actually carried out and is appropriately modified as circumstances change.
Answer: False Level: Medium LO: 2
7. The controller occupies a line position in an organization.
2
, BESTLEC
Answer: False Level: Easy LO: 2
8. Decentralization means the delegation of decision-making authority throughout an
organization by allowing managers at various operating levels to make key decisions relating to
their own area of responsibility.
Answer: True Level: Easy LO: 2
9. A firm's organization chart will normally show both the formal and informal lines of
reporting and communication.
C
Answer: False Level: Easy LO: 2
LE
10. The Chief Financial Officer of an organization is responsible for ensuring that line
ST
operations run smoothly.
Answer: False Level: Medium LO: 2
BE
11. Traditionally, companies have maintained large amounts of raw materials, work in
process, and finished goods inventories to act as buffers so that operations can proceed smoothly
even if there are unanticipated disruptions.
Answer: True Level: Medium LO: 3
12. Process Reengineering is generally considered to be a more radical approach to
improvement than Total Quality Management.
Answer: True Level: Easy LO: 3
3
, BESTLEC
13. Process Reengineering emphasizes a team approach involving front-line workers,
whereas Total Quality Management is usually implemented using outside specialists and is
imposed from above.
Answer: False Level: Medium LO: 3
14. If ethical standards were not generally followed, one of the results would probably be
fewer goods and services available in the marketplace.
Answer: True Level: Medium LO: 4
C
15. The Standards of Ethical Conduct for Management Accountants promulgated by the
Institute of Management Accountants specifically state that management accountants' sole ethical
LE
responsibility is to not break any laws.
Answer: False Level: Easy LO: 4
ST
BE
4
