Test Bank - for Managerial Accounting 4th Edition by Charles E. Davis, Elizabeth Davis, Chapter( 1-13 )All Chapters Covered |Complete Guide A+|Newest Version 2025.

TEST BANK FOR
Managerial Accounting 4th Edition by Charles E. Davis
Chapter 1
Accounting as a Tool for Management

CHAPTER LEARNING OBJECTIVES

1. Define managerial accounting (Unit 1.1)
There are several formal definitions of managerial accounting. A simple one is “the
generation of relevant information to support management’s decision-making
activities.”
2. Describe the differences between managerial and financial accounting
(Unit 1.1)
Managerial accounting’s primary users are managers and decision makers within an
organization, whereas financial accounting is aimed primarily at external users. Unlike
GAAP that guides financial accounting, there are no mandated rules in managerial
accounting. Managerial accounting reports focus on operating segments, while financial
accounting statements report results for the organization as a whole. Managerial
accounting is concerned more with projecting future results than reporting past results.
Managerial information is prepared to take advantage of a window of opportunity, even
if some accuracy must be sacrificed. Financial accounting information is balanced to the
penny and is delivered after the end of the accounting period.
3. List and describe the four functions of managers (Unit 1.1)
Planning means setting a direction for the organization. Long-term, or strategic planning
provides direction for a five- to ten-year period. Short-term or operational planning
provides more detailed guidance for the coming year; it translates the company’s
strategy into action steps. Controlling is the monitoring of day-to-day operations to
identify any problems that require corrective action. Evaluating is the process of
comparing a particular period’s actual results to planned results, for the purpose of
assessing managerial performance. Decision making means choosing between
alternative courses of action.
4. Explain how the selection of a particular business strategy determines the
information that managers need to run an organization effectively (Unit
1.2)
To run a business effectively, managers need information that shows how well
operations are meeting the organization’s strategic goals. For instance, if the
organization’s strategy is to be a low-cost producer, information about product costs
and cost variances will be more useful to managers than information about research
and development.




SCHOLARVAULT

,5. Discuss the importance of ethical behavior in managerial accounting
#ds #ds #ds #ds #ds #ds #ds #ds


(Unit 1.3)
#ds #ds


Ethical #dsbehavior #dsmeans #dsknowing #dsright #dsfrom #dswrong #dsand #dsthen #dsdoing #dsthe #dsright
#dsthing. #dsMany #dscompanies #dsand #dsmost #dsprofessional #dsorganizations #dshave #dscodes #dsof

#dsconduct #dsto #dsguide

employees’ #dsactions. #dsActing #dsunethically #dscan #dslead #dsto #dsillegal #dsactivity #dsand
#dsultimately #dsto #dsthe #dsdestruction #dsof #dsthe #dsfirm. #dsFurthermore, #dsresearch #dshas #dsshown

#dsthat #dsa #dspublic #dscommitment #dsto #dsethical #dsbehavior #dscan #dslead #dsto #dssuperior #dsfinancial

#dsperformance.




SCHOLARVAULT

, TRUE-FALSE STATEMENTS #ds




1. Management #dsaccounting #dsis #dsthe #dsgeneration #dsof #dsrelevant #dsinformation #dsand #dsanalysis #dsprovided
#dsto #dsexternal #dsusers.

Ans: #dsFalse #ds– #dsManagement #dsaccounting #dsis #dsthe #dsgeneration #dsof #dsrelevant #dsinformation #dsand #dsanalysis #dsto
#dssupport #dsmanagers’ #dsdecision- #dsmaking #dsactivities, #dsLO: #ds1, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1,

#dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting



2. The #dsAmerican #dsInstitute #dsof #dsCertified #dsPublic #dsAccountants #dsis #dsthe #dsleading #dsorganization #dsfor
#dsmanagement #dsaccountants #dsin #dsthe #dsUnited #dsStates.

Ans: #dsFalse #ds– #dsThe #dsInstitute #dsof #dsManagement #dsAccountants #ds(IMA) #dsis #dsthe #dsleading #dsorganization #dsfor
#dsmanagement #dsaccountants #dsin #dsthe #dsUnited #dsStates, #dsLO: #ds1, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1,

#dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




3. The #dsprimary #dsusers #dsof #dsmanagerial #dsaccounting #dsinformation #dsare #dsmanagers #dsand #dsother
#dsinternal #dsdecision- #dsmakers.

Ans: #dsTrue, # d s LO: #ds2, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting




4. Managerial #dsaccounting #dsprovides #dsreports #dsand #dsinformation #dsfor #dsa #dsrange #dsof #dsdecision
#dsmakers #dsoutside #dsan #dsorganization.

Ans: #dsFalse #ds– #dsManagerial #dsaccounting #dsprovides #dsreports #dsand #dsinformation #dsfor #dsa #dsrange #dsof #dsdecision #dsmakers
#dswithin #dsan #dsorganization, #dsLO: #ds2, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA

#dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting




5. Managerial #dsaccounting #dsdiffers #dsfrom #dsfinancial #dsaccounting #dsin #dsthat #dsmanagerial
#dsaccounting #dshas #dsno #dscomparable #dsset #dsof #dsrules #dsgoverning #dswhat #dsinformation #dsmust #dsbe

#dsprovided #dsto #dsdecision-makers #dsor #dshow #dsthat #dsinformation #dsis #dspresented.

Ans: #dsTrue, #dsLO: #ds2, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting




6. Managerial #dsaccounting #dsuses #dshistorical #dsinformation, #dsoften #dswith #dsthe #dspurpose #dsof
#dscomparing #dsactual #dsresults #dsto #dsbudgeted #dsresults.

Ans: #dsTrue, #dsLO: #ds2, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting




7. Decision #dsmakers #dsmight #dshave #dsa #dslong #dslist #dsof #dsinformation #dsthey #dswould #dsfind #dshelpful, #dsand #dsthey #dsare
#dsgenerally

not #dswilling #dsto #dssacrifice #dsaccuracy #dsfor #dshaving #dsthe #dsinformation #dsquickly.
Ans: #dsFalse #ds– #dsDecision #dsmakers #dsmight #dshave #dsa #dslong #dslist #dsof #dsinformation #dsthey #dswould #dsfind #dshelpful. #dsBut
#dssometimes #dsthey #dsmight #dsneed #dsto #dssacrifice #dsprecision #dsfor #dstimeliness, #dsLO: #ds2, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty:

#dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




8. Managerial #dsaccounting #dsis #dsdesigned #dsto #dsassist #dsmanagers #dswith #dsfour #dsgeneral #dsactivities:
#dsplanning, #dscontrolling, #dsevaluating, #dsand #dsdecision #dsmaking.

Ans: #dsTrue, #dsLO: #ds3, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




9. Long-term #dsplanning #dsis #dsoften #dsreferred #dsto #dsas #dsreporting.
Ans: #dsTrue, #dsLO: #ds3, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




SCHOLARVAULT

, 10. One #dspurpose #dsof #dsplanning #dsactivities #dsis #dsto #dsmonitor #dsday-to-day #dsoperations #dsto #dsensure #dsthat
#dsprocesses #dsare #dsoperating #dsas #dsexpected.

Ans: #dsFalse #ds– #dsOne #dspurpose #dsof #dscontrolling #dsactivities #dsis #dsto #dsmonitor #dsday-to-day #dsoperations #dsto #dsensure #dsthat
#dsprocesses #dsare #dsoperating #dsas #dsexpected, #dsLO: #ds3, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB:

#dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




11. All #dsother #dsthings #dsheld #dsequal, #dsthe #dsmore #dsfrequent #dsthe #dscontrolling #dsactivity, #dsthe #dsfaster #dsan
#dsout-of-control #dsprocess #dscan #dsbe #dscorrected.

Ans: #dsTrue, #dsLO: #ds3, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsReporting




12. The #dstask #dsof #dsassessing #dshow #dswell #dsemployees #dshave #dsperformed #dsrelative #dsto #dsexpectations #dsis
#dsa #dscontrolling #dsactivity.

Ans: #dsFalse #ds– #dsThe #dstask #dsof #dsaccessing #dshow #dswell #dsemployees #dshave #dsperformed #dsrelative #dsto #dsexpectations #dsis
#dsconsidered #dsan #dsevaluation #dsactivity, #dsLO: #ds3, #dsBloom: #dsK, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic

#dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




13. Preparers #dsof #dsmanagerial #dsaccounting #dsinformation #dsare #dsgenerally #dsnot #dsactive #dsparticipants #dsin
#dsthe #dsdecision- #dsmaking #dsprocess.

Ans: #dsFalse #ds– #dsPreparers #dsof #dsmanagerial #dsaccounting #dsinformation #dsare #dsno #dslonger #dssolely #dsnumber #dscrunchers,
#dsbut #dsactive #dsparticipants #dsin #dsthe #dsdecision-making #dsprocess, #dsLO: #ds3, #dsBloom: #dsC, #dsUnit: #ds1-1, #dsDifficulty: #dsEasy, #dsMin:

#ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




14. Managerial #dsaccounting #dsinformation #dsis #dsalways #dsprepared #dsby #dsthe #dscontroller #dsor #dscost
#dsaccountant. #dsAns: #dsFalse #ds– #dsManagerial #dsaccounting #dsinformation #dscan #dsbe #dsprovided #dsby #dsa #dscontroller, #dsa

#dsplant #dsaccountant, #dsa #dscost #dsaccountant, #dsa #dsfinancial #dsanalyst, #dsa #dsbudget #dsor #dscost #dsanalyst, #dsa #dsgeneral
accountant, #dsor #dseven #dsa #dschief #dsfinancial #dsofficer, #dsLO: #ds3, #dsBloom: #dsC, #dsUnit #ds1-1, #dsDifficulty: #dsEasy, #dsMin: #ds1,
#ds

#dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone, #dsIMA: #dsBusiness #dsOperations




15. Managerial #dsaccounting #dsinformation #dsprovides #dsfeedback #dsabout #dshow #dswell #dsthe
#dsorganization #dsis #dsimplementing #dsits #dsstrategy #dsand #dsachieving #dsits #dsgoals.

Ans: #dsTrue, #dsLO: #ds4, #dsBloom: #dsK, #dsUnit #ds1-2, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsStrategy




16. For #dsthe #dsproduct #dsdifferentiation #dsstrategy, #dscompanies #dswill #dswant #dsinformation #dson #dsquality,
#dssuch #dsas #dsdefect #dsrates, #dspercentage #dsof #dson-time #dsdeliveries, #dsand #dscustomer #dssatisfaction.

Ans: #dsTrue, #dsLO: #ds4, #dsBloom: #dsK, #dsUnit #ds1-2, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsStrategy




17. If #dsa #dscompany #dsfollows #dsa #dsstrategy #dsof #dsproduct #dsdifferentiation, #dsit #dswill #dsseek #dsways #dsto #dsset #dsits #dsproducts
#dsapart

from #dscompetitors’ #dsin #dsterms #dsof #dsquality, #dsdesign #dsor #dsservice.
Ans: #dsTrue, #dsLO: #ds4, #dsBloom: #dsK, #dsUnit #ds1-2, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting,
#dsAICPA #dsPC: #dsNone, #dsIMA: #dsStrategy




18. A #dscompany #dsthat #dsfocuses #dson #dsproduct #dsdifferentiation #dsdoes #dsnot #dsneed #dsto #dsmonitor #dsproduct
#dscosts #dsbecause #dsif #dsthe #dsquality #dsis #dssufficient, #dscustomers #dswill #dspay #dsthe #dsprice.

Ans: #dsFalse #ds– #dsA #dscompany #dsthat #dsfocuses #dson #dsproduct #dsdifferentiation #dsmust #dsmonitor #dsproduct #dscosts #dsbecause #dsif
#dstoo #dsmuch #dscost #dsis #dsincurred #dsfor #dsquality, #dsthe #dssales #dsprice #dswill #dsbe #dstoo #dshigh #dsto #dsbe #dscompetitive, #dsLO: #ds4,

#dsBloom: #dsC, #dsUnit #ds1-2, #dsDifficulty: #dsEasy, #dsMin: #ds1, #dsAACSB: #dsAnalytic, #dsAICPA #dsFN: #dsReporting, #dsAICPA #dsPC: #dsNone,

#dsIMA: #dsStrategy




SCHOLARVAULT