TEST BANK
%cg
Managerial Accounting
%cg
by Garrison, Noreen, Brewer
%cg %cg %cg
Twelfth Edition
%cg
,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, which is primarily concerned with the past.
Answer: True Level: Easy LO: 1
4. Managerial accounting is not needed in a non-profit or governmental organization.
Answer: False Level: Easy LO: 1
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.
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
,Chapter 1 Managerial Accounting and the Business
%cg % c g %cg %cg %cg %cg
Environment
%cg
9. A %cgfirm's %cgorganization %cgchart %cgwill %cgnormally %cgshow %cgboth %cgthe %cgformal %cgand
%cginformal %cglines %cgof %cgreporting %cgand %cgcommunication.
Answer: %cgFalse % c g %cg Level: %cgEasy % c g %cg LO: %cg2
10. The %cgChief %cgFinancial %cgOfficer %cgof %cgan %cgorganization %cgis %cgresponsible %cgfor
%cgensuring %cgthat %cgline %cgoperations %cgrun %cgsmoothly.
Answer: %cgFalse % c g %cg Level: %cgMedium % c g %cg LO: %cg2
11. Traditionally, %cgcompanies %cghave %cgmaintained %cglarge %cgamounts %cgof %cgraw
%cgmaterials, %cgwork %cgin %cgprocess, %cgand %cgfinished %cggoods %cginventories %cgto %cgact %cgas
%cgbuffers %cgso %cgthat %cgoperations %cgcan %cgproceed %cgsmoothly %cgeven %cgif %cgthere %cgare
%cgunanticipated %cgdisruptions.
Answer: %cgTrue % c g %cg Level: %cgMedium % c g %cg LO: %cg3
12. Process %cgReengineering %cgis %cggenerally %cgconsidered %cgto %cgbe %cga %cgmore %cgradical
%cgapproach %cgto %cgimprovement %cgthan %cgTotal %cgQuality %cgManagement.
Answer: %cgTrue % c g %cg Level: %cgEasy % c g %cg LO: %cg3
13. Process %cgReengineering %cgemphasizes %cga %cgteam %cgapproach %cginvolving %cgfront-line
%cgworkers, %cgwhereas %cgTotal %cgQuality %cgManagement %cgis %cgusually %cgimplemented
%cgusing %cgoutside %cgspecialists %cgand %cgis %cgimposed %cgfrom %cgabove.
Answer: %cgFalse % c g %cg Level: %cgMedium % c g %cg LO: %cg3
14. If %cgethical %cgstandards %cgwere %cgnot %cggenerally %cgfollowed, %cgone %cgof %cgthe %cgresults
%cgwould %cgprobably %cgbe %cgfewer %cggoods %cgand %cgservices %cgavailable %cgin %cgthe
%cgmarketplace.
Answer: %cgTrue % c g %cg Level: %cgMedium % c g %cg LO: %cg4
15. The %cgStandards %cgof %cgEthical %cgConduct %cgfor %cgManagement %cgAccountants
%cgpromulgated %cgby %cgthe %cgInstitute %cgof %cgManagement %cgAccountants %cgspecifically
%cgstate %cgthat %cgmanagement %cgaccountants' %cgsole %cgethical %cgresponsibility %cgis %cgto %cgnot
%cgbreak %cgany %cglaws.
Answer: %cgFalse % c g %cg Level: %cgEasy % c g %cg LO: %cg4
4
, Multiple %cgChoice %cgQuestions
16. Management %cgaccounting %cgfocuses %cgprimarily %cgon %cgproviding %cgdata %cgfor:
A) internal %cguses %cgby %cgmanagers.
B) external %cguses %cgby %cgstockholders %cgand %cgcreditors.
C) external %cguses %cgby %cgthe %cgInternal %cgRevenue %cgService.
D) external %cguses %cgby %cgthe %cgSecurities %cgand %cgExchange %cgCommission.
Answer: %cgA % c g %cg Level: %cgEasy % c g %cg LO: %cg1
17. Managerial %cgaccounting:
A) is %cgmore %cgfuture %cgoriented %cgthan %cgfinancial %cgaccounting.
B) tends %cgto %cgsummarize %cginformation %cgmore %cgthan %cgfinancial %cgaccounting
C) is %cgprimarily %cgconcerned %cgwith %cgproviding %cginformation %cgto %cgexternal %cgusers.
D) is %cgmore %cgconcerned %cgwith %cgprecision %cgthan %cgtimeliness.
Answer: %cgA % c g %cg Level: %cgEasy % c g %cg LO: %cg1
18. Compared %cgto %cgfinancial %cgaccounting, %cgmanagerial %cgaccounting %cgplaces %cgmore %cgemphasis %cgon:
A) the %cgflexibility %cgof %cginformation.
B) the %cgprecision %cgof %cginformation.
C) the %cgtimeliness %cgof %cginformation.
D) both %cgA %cgand %cgC %cgabove.
Answer: %cgD % c g %cg Level: %cgEasy % c g %cg LO: %cg1
19. The %cgfunction %cgof %cgmanagement %cgthat %cgcompares %cgplanned %cgresults %cgto %cgactual
%cgresults %cgis %cgknown %cgas:
A) planning.
B) directing %cgand %cgmotivating.
C) controlling.
D) decision %cgmaking.
Answer: %cgC % c g %cg Level: %cgEasy % c g %cg LO: %cg2
20. Which %cgof %cgthe %cgfunctions %cgof %cgmanagement %cginvolves %cgoverseeing %cgday-to-day %cgactivities?
A) Planning
B) Directing %cgand %cgmotivating
C) Controlling
D) Decision %cgmaking
Answer: %cgB % c g %cg Level: %cgEasy % c g %cg LO: %cg2
%cg
Managerial Accounting
%cg
by Garrison, Noreen, Brewer
%cg %cg %cg
Twelfth Edition
%cg
,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, which is primarily concerned with the past.
Answer: True Level: Easy LO: 1
4. Managerial accounting is not needed in a non-profit or governmental organization.
Answer: False Level: Easy LO: 1
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.
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
,Chapter 1 Managerial Accounting and the Business
%cg % c g %cg %cg %cg %cg
Environment
%cg
9. A %cgfirm's %cgorganization %cgchart %cgwill %cgnormally %cgshow %cgboth %cgthe %cgformal %cgand
%cginformal %cglines %cgof %cgreporting %cgand %cgcommunication.
Answer: %cgFalse % c g %cg Level: %cgEasy % c g %cg LO: %cg2
10. The %cgChief %cgFinancial %cgOfficer %cgof %cgan %cgorganization %cgis %cgresponsible %cgfor
%cgensuring %cgthat %cgline %cgoperations %cgrun %cgsmoothly.
Answer: %cgFalse % c g %cg Level: %cgMedium % c g %cg LO: %cg2
11. Traditionally, %cgcompanies %cghave %cgmaintained %cglarge %cgamounts %cgof %cgraw
%cgmaterials, %cgwork %cgin %cgprocess, %cgand %cgfinished %cggoods %cginventories %cgto %cgact %cgas
%cgbuffers %cgso %cgthat %cgoperations %cgcan %cgproceed %cgsmoothly %cgeven %cgif %cgthere %cgare
%cgunanticipated %cgdisruptions.
Answer: %cgTrue % c g %cg Level: %cgMedium % c g %cg LO: %cg3
12. Process %cgReengineering %cgis %cggenerally %cgconsidered %cgto %cgbe %cga %cgmore %cgradical
%cgapproach %cgto %cgimprovement %cgthan %cgTotal %cgQuality %cgManagement.
Answer: %cgTrue % c g %cg Level: %cgEasy % c g %cg LO: %cg3
13. Process %cgReengineering %cgemphasizes %cga %cgteam %cgapproach %cginvolving %cgfront-line
%cgworkers, %cgwhereas %cgTotal %cgQuality %cgManagement %cgis %cgusually %cgimplemented
%cgusing %cgoutside %cgspecialists %cgand %cgis %cgimposed %cgfrom %cgabove.
Answer: %cgFalse % c g %cg Level: %cgMedium % c g %cg LO: %cg3
14. If %cgethical %cgstandards %cgwere %cgnot %cggenerally %cgfollowed, %cgone %cgof %cgthe %cgresults
%cgwould %cgprobably %cgbe %cgfewer %cggoods %cgand %cgservices %cgavailable %cgin %cgthe
%cgmarketplace.
Answer: %cgTrue % c g %cg Level: %cgMedium % c g %cg LO: %cg4
15. The %cgStandards %cgof %cgEthical %cgConduct %cgfor %cgManagement %cgAccountants
%cgpromulgated %cgby %cgthe %cgInstitute %cgof %cgManagement %cgAccountants %cgspecifically
%cgstate %cgthat %cgmanagement %cgaccountants' %cgsole %cgethical %cgresponsibility %cgis %cgto %cgnot
%cgbreak %cgany %cglaws.
Answer: %cgFalse % c g %cg Level: %cgEasy % c g %cg LO: %cg4
4
, Multiple %cgChoice %cgQuestions
16. Management %cgaccounting %cgfocuses %cgprimarily %cgon %cgproviding %cgdata %cgfor:
A) internal %cguses %cgby %cgmanagers.
B) external %cguses %cgby %cgstockholders %cgand %cgcreditors.
C) external %cguses %cgby %cgthe %cgInternal %cgRevenue %cgService.
D) external %cguses %cgby %cgthe %cgSecurities %cgand %cgExchange %cgCommission.
Answer: %cgA % c g %cg Level: %cgEasy % c g %cg LO: %cg1
17. Managerial %cgaccounting:
A) is %cgmore %cgfuture %cgoriented %cgthan %cgfinancial %cgaccounting.
B) tends %cgto %cgsummarize %cginformation %cgmore %cgthan %cgfinancial %cgaccounting
C) is %cgprimarily %cgconcerned %cgwith %cgproviding %cginformation %cgto %cgexternal %cgusers.
D) is %cgmore %cgconcerned %cgwith %cgprecision %cgthan %cgtimeliness.
Answer: %cgA % c g %cg Level: %cgEasy % c g %cg LO: %cg1
18. Compared %cgto %cgfinancial %cgaccounting, %cgmanagerial %cgaccounting %cgplaces %cgmore %cgemphasis %cgon:
A) the %cgflexibility %cgof %cginformation.
B) the %cgprecision %cgof %cginformation.
C) the %cgtimeliness %cgof %cginformation.
D) both %cgA %cgand %cgC %cgabove.
Answer: %cgD % c g %cg Level: %cgEasy % c g %cg LO: %cg1
19. The %cgfunction %cgof %cgmanagement %cgthat %cgcompares %cgplanned %cgresults %cgto %cgactual
%cgresults %cgis %cgknown %cgas:
A) planning.
B) directing %cgand %cgmotivating.
C) controlling.
D) decision %cgmaking.
Answer: %cgC % c g %cg Level: %cgEasy % c g %cg LO: %cg2
20. Which %cgof %cgthe %cgfunctions %cgof %cgmanagement %cginvolves %cgoverseeing %cgday-to-day %cgactivities?
A) Planning
B) Directing %cgand %cgmotivating
C) Controlling
D) Decision %cgmaking
Answer: %cgB % c g %cg Level: %cgEasy % c g %cg LO: %cg2
