1. 1 K 11. 1 K 21. 2 K 31. 4 K 41. 5 C

Test Bank for Managerial Accounting, 6e James Jiambalvo (All Chapters) 1 / 4

CHAPTER 1

Managerial Accounting in the Information Age Summary of Questions by Objectives and Bloom’s Taxonomy

Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements

1. 1 K 11. 1 K 21. 2 K 31. 4 K 41. 5 C

2. 1 K 12. 1 K 22. 2 K 32. 4 K 42. 5 K

3. 1 K 13. 1 K 23. 2 K 33. 4 K 43. 5 K

4. 1 K 14. 1 K 24. 2 K 34. 4 K 44. 5 K

5. 1 K 15. 1 K 25. 2 K 35. 4 K 45. 5 K

6. 1 K 16. 1 K 26. 3 K 36.

4 K 46. 5 K

7. 1 C 17. 1 K 27. 3 K 37.

4 K 47. 5 K

8. 1 K 18. 2 K 28. 3 K 38. 4 K 48. 5 K

9. 1 K 19. 2 K 29. 3 C 39. 4 K

10. 1 K 20. 2 K 30. 3 K 40. 4 K

Multiple Choice Questions

49. 1 K 68. 2 C 87. 2 AP 106. 3 K 125. 5 K

50. 1 K 69. 2 K 88. 2 AP 107. 3 C 126. 5 K

51. 1 K 70. 2 K 89. 2 AP 108. 3 C 127. 5 K

52. 1 C 71. 2 K 90. 2 AP 109. 3 AP 128. 2 AP

53. 1 C 72. 2 K 91. 2 K 110. 3 AP 129. 2 AP

54. 1 K 73. 2 K 92. 2 AP 111. 3 AP 130. 2 AP

55. 1 K 74. 2 K 93. 2 AP 112. 3 AP 131. 2 AP

56. 1 K 75. 2 C 94. 2 AP 113. 3 AP 132. 2 AP

57. 1 K 76. 2 C 95. 2 AP 114. 3 AP 133. 2 AP

58. 1 K 77. 2 K 96. 2 AP 115. 3 K 134. 2 AP

• 1 K 78. 2 K 97. 2 Ap 116. 4 K 135. 3 AP

60. 1 K 79. 2 C 98. 2 AP 117. 4 K 136. 3 AP

61. 1 K 80. 2 C 99. 3 AP 118. 4 K 137. 2 AP

62. 1 K 81. 2 K 100. 3 AP 119. 5 K 138. 2 AP

63. 2 K 82. 2 AP 101. 3 AP 120. 5 K 139. 2 AP

64. 2 K 83. 2 AP 102. 3 K 121. 5 K 140. 2 AP

65. 2 AP 84. 2 AP 103. 3 K 122. 5 K 141. 2 AP

66. 2 C 85. 2 AP 104. 3 K 123. 5 K 142. 2 AP

67. 2 C 86. 2 AP 105. 3 K 124. 5 K

Matching

143. 1,2,3,4

7,7 K Exercises

144. 1 K 147. 2 AP 150. 2 AP 153. 2,3 AP 156. 2,3 AP

145. 2 K 148. 2 K 151. 2,3 AP 154. 2,3 AP 157. 2,3 AN

146. 2 AP 149. 2 K 152. 2 AP 155. 1,2 AP 158. 2,3 AN

Challenge Exercises

159. 2,3 AN 160. 2,3 AN

Short-Answer Essays

161. 1 K 163. 1 C 165. 3 C 167. 4 C

162. 1 K 164. 2 C 166. 3 C

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Test Bank to accompany Jiambalvo Managerial Accounting, 6 th

Edition 1-2

TRUE-FALSE STATEMENTS

• Financial accounting stresses accounting concepts and procedures that are relevant to

preparing reports for internal users of accounting information.

• The goal of managerial accounting is to provide information for planning, controlling, and

reporting information to shareholders.

• A thorough understanding of managerial accounting is essential to be an effective manager.

• A production cost budget provides details of planned production amounts and the cost of

resources needed for production.

• Budgets can be used to communicate a company’s goals to employees.

• Only amounts that can be expressed in dollars and cents can be used in preparing budgets.

• A favorable evaluation of an operation indicates that the manager of that operation is

performing adequately.

• Performance reports are used for control purposes.

• Performance reports, like other managerial accounting reports, must follow GAAP.

• Budgets show comparisons of current period performance to the planned performance.

• Management by exception requires managers to investigate every difference between actual

and budgeted costs that causes profit to be less than budgeted.

• Decisions to reward or punish managers are part of the planning and control process.

• Managerial accounting is directed at internal users of accounting information.

• Financial accounting must follow generally accepted accounting principles, whereas

managerial accounting stresses information that is useful to managers.

15 Managerial accounting may present more detailed information than financial accounting.

• Managerial accounting stresses that the information provided should be useful to decision

makers such as creditors and shareholders.

• Financial accounting is concerned with presenting results of past transactions, while

managerial accounting places considerable emphasis on the future.

• Variable costs in total increase or decrease in proportion with changes in the level of business

activity.

• Equipment depreciation is generally a controllable cost for a factory department supervisor.

• Fixed cost per unit remains the same even though there is a change in the number of units

produced.

• Variable cost per unit remains constant when the number of units produced changes. 3 / 4

Chapter 1 Managerial Accounting in the Information Age 1-3

• Sunk costs are never a consideration in incremental analysis.

• Opportunity costs are the value of benefits forgone when one alternative is selected over

another.

• Indirect costs are directly traceable to a product, activity, or department.

• Since a manager can influence noncontrollable costs, they should be considered when

evaluating a manager’s performance.

• Incremental analysis involves calculating the difference in revenue and difference in costs

between alternatives.

• The actions of a manager are influenced by the performance measures that are used to

evaluate the manager.

• Incremental analysis is the appropriate way to approach the solution to all business problems.

• A good single measure of performance for a sales force would be the ratio of sales to new

customers to total sales.

• Costs that increase due to a special order are not considered as incremental.

• Managerial accounting is a key provider of information that impacts the information age.

• Firm value is created when the value to the customer of receiving products and services

exceeds the cost of these activities,

• One aspect of the value chain involves information flows between a company and its

customers.

• Businesses sometimes share sales databases with suppliers so suppliers can respond more

quickly.

• Enterprise resource planning systems focus on managing a variety of customer interactions.

• Enterprise resource planning systems (ERP) often support accounting, human resources, and

e-commerce, in addition to production.

• Supply chain management systems (SCM) allow suppliers some access to a company’s

databases so goods can more profitably be delivered to a company’s customers.

• Customer Relationship Management Systems (CRM) involve activities between companies

and its suppliers in an effort to enhance production and delivery of goods to customers.

• A Customer Relationship Management System (CRM) might allow a customer to track his/her

package as it is being shipped across the country.

• Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain

Management (SCM).

• Managers that are able to recognize all ethical dilemmas have the most profitable businesses.
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