TEST BANK FOR ALL CHAPTERS Chapter 01 An Introduction to Managerial Accounting
True / False Questions 1. Managers everywhere carry out three major activities: planning, implementation, and control. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-02 Strategy Topic: 01-03 Planning Topic: 01-04 Implementation Topic: 01-05 Control
2. The theory of constraint (TOC) framework focuses on effectively managing constraints as the key to success. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting. Topic: 01-24 The Theory of Constraints
3. Managerial Accounting reports are prepared for external users while Financial Accounting reports are prepared for internal users. FALSE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-06 Financial and Managerial Accounting Topic: 01-07 For the Managers
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TEST BANK FOR ALL CHAPTERS 4. Merchandising firms largely refer to retail and wholesale outlets that buy goods from suppliers and resell them to customers. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
5. Merchandising and manufacturing firms generate revenue by selling products. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
6. Service firms do not sell any products but generate revenues by offering one or more types of services. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-01 The Management Cycle and the Need for Managerial Accounting Information
7. Managers assign tasks to employees, arbitrate disputes, answer questions, solve on the spot problems, and make many decisions that affect customers and employees, which in turn, will likely influence future financial and nonfinancial performance. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-04 Implementation
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TEST BANK FOR ALL CHAPTERS 8. Planning involves selecting a course of action and specifying how the action will be implemented. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-03 Planning
9. Control involves the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-05 Control
10. Strategy pertains to the general direction in which an organization plans to move to achieve its goals and objectives. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-02 Strategy
11. Management accountants are not required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-06 Financial and Managerial Accounting Topic: 01-12 Regulation
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TEST BANK FOR ALL CHAPTERS 12. Management accounting information is primarily concerned with reports on the organization as a whole while financial accounting focuses more on the individual segments of the organization. FALSE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-11 Focus on Segments of an Organization
13. The Code of Ethics for Professional Accountants established by the International Federation of Accountants governs only the activities of accountants in public practice. FALSE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-03 Understand the importance of professional responsibility. Topic: 01-27 Ethical Responsibility and Corporate Governance Topic: 01-28 Professional Ethics
14. Performance reports provide formal feedback to assist in determining whether operations and performance are on track. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-05 Control
15. Planning includes identifying alternatives and then selecting the one that does the best job of furthering the organization's objectives. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-01 Understand the basics of managerial accounting. Topic: 01-03 Planning
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TEST BANK FOR ALL CHAPTERS 16. Reduction in tariffs, quotas, and other barriers to free trade; improvements in global transportation system; and increasing sophistication in international trade markets, are several factors that have led to an increase in worldwide competition in many industries. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting. Topic: 01-16 Globalization
17. One major implication of globalization for many organizations is that they must find new ways of conducting business. TRUE
Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting. Topic: 01-16 Globalization
18. The main idea underlying the lean business model is the elimination of waste. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting. Topic: 01-17 The Lean Business Model
19. Companies that use the just-in-time (JIT) approach purchase materials and produce units only as needed to meet actual customer demand. TRUE
Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-02 Understand the role of globalization and the lean business model in influencing managerial accounting. Topic: 01-19 The JIT Approach
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