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1 Copyright © 2023 Pearson Education, Inc.Managerial Accounting, 1e (Cainas, Pope, Joszi)

Chapter 1 Managerial Accounting: An Information System

Learning Objective 1.1 1) Financial accounting emphasizes relevant, detailed information that may be used to forecast future performance.

Answer: FALSE

Objective: 1

AACSB: Application of knowledge

2) Managerial accounting requires accountants to follow generally accepted accounting principles (GAAP) when producing operational reports.

Answer: FALSE

Objective: 1

AACSB: Application of knowledge

3) The annual tax return filed with the Internal Revenue Service (IRS) is an example of a report generated from a financial accounting system.

Answer: TRUE

Objective: 1

AACSB: Application of knowledge

4) The number of defective materials received from vendors could be directly reported for managerial accounting but not financial accounting.

Answer: TRUE

Objective: 1

AACSB: Reflective thinking

5) Financial accounting and managerial accounting differ in that:

• financial reporting is focused on forecasted future performance.
• managerial accounting reporting requirements are based on the needs of management.
• managerial accounting information is primarily used by individuals external to the business.
• financial reporting provides relevant and detailed information.

Answer: B

Objective: 1

AACSB: Application of knowledge

6) The objective of financial accounting is to:

• provide summarized reports to external stakeholders for decision making.
• provide detailed information to operational and upper-level managers for decision making.
• generate reports that meet the needs of management.
• emphasize current, relevant performance.

Answer: A

Objective: 1

AACSB: Application of knowledge

Managerial Accounting 1e Jennifer Cainas, Celina Jozsi, Kelly Richmond Pope (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © 2023 Pearson Education, Inc.7) A report detailing the number of on-time deliveries by geographic area is most likely used by

a(n):

• investor.
• upper-level manager.
• vendor.
• operations manager.

Answer: D

Objective: 1

AACSB: Reflective thinking

8) A staff accountant is provided with information about the projected profitability of a company's three product lines for the upcoming year.

What is NOT a reason this represents a managerial report?

• The information was provided to an external user.
• The report's focus is on forecasted future performance.
• The information is detailed.
• The data is related to both financial and operational functions.

Answer: A

Objective: 1

AACSB: Reflective thinking

9) Which of the following uses managerial accounting information?

• City governments and universities.
• An International consulting firm.
• Small, individually owned business.
• All of the above.

Answer: D

Objective: 1

AACSB: Reflective thinking

Learning Objective 1.2

1) Planning is a more important function than control because it is done first.

Answer: FALSE

Objective: 2

AACSB: Reflective thinking

2) Identify the appropriate order in which the specified managerial functions should be performed.

• Implementing & Controlling; Planning; Decision Making
• Decision Making; Implementing & Controlling; Planning
• Planning; Implementing & Controlling; Decision Making
• Implementing & Controlling; Decision Making; Planning

Answer: C

Objective: 2

AACSB: Application of knowledge 2 / 4

3 Copyright © 2023 Pearson Education, Inc.

3) Decreasing costs by 5% this year is an example of a long-term goal.

Answer: FALSE

Objective: 2

AACSB: Application of knowledge

4) Which is NOT an example of an activity performed in the planning stage?

• Compare the results of current year activities against the plan and investigate all significant

deviations.

• Review historical sales data for the business and its competitors.
• Consider new products under development.
• Obtain certain economic and industry data to understand the current marketplace conditions.

Answer: A

Objective: 2

AACSB: Reflective thinking

5) Control involves comparing the company's plan (budget) to the actual results achieved and investigating unusual differences.

Answer: TRUE

Objective: 2

AACSB: Application of knowledge

6) Operational decisions relate to which markets, customers, services, or products to provide.

Answer: FALSE

Objective: 2

AACSB: Application of knowledge

7) The current challenge with obtaining data for decision making is identifying both relevant and useful data.

Answer: TRUE

Objective: 2

AACSB: Application of knowledge

8) Information must be presented in the form of a report to be useful for decision making.

Answer: FALSE

Objective: 2

AACSB: Application of knowledge

9) Planning is to setting goals and objectives as Decision Making is to:

• turning a business plan into action.
• selecting a course of action for the business.
• monitoring actual results against the plan.
• identifying a strategic vision for the business.

Answer: B

Objective: 2

AACSB: Application of knowledge

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4 Copyright © 2023 Pearson Education, Inc.Learning Objective 1.3

1) The information needs of operations and upper-level management are the same.

Answer: FALSE

Objective: 3

AACSB: Application of knowledge

2) Examples of daily reports received by operations managers include: payments received by customers, number of on-time deliveries, and customer satisfaction surveys.

Answer: TRUE

Objective: 3

AACSB: Reflective thinking

3) Upper-level managers are to "who are my biggest competitors?" as operations managers are

to:

• "are my employees performing efficiently and effectively?"
• "do we require funding for upcoming warehouse upgrades?"
• "should I provide additional services to customers?"
• "what is my target market?"

Answer: A

Objective: 3

AACSB: Reflective thinking

Learning Objective 1.4

1) Managers use managerial accounting information to create value for planning and control decisions but not for product costing and non-routine decisions.

Answer: FALSE

Objective: 4

AACSB: Application of knowledge

2) Planning and control decisions should include analysis of both financial and non-financial information.

Answer: TRUE

Objective: 4

AACSB: Application of knowledge

3) Identify the characteristics of information necessary for successful decision making.

• Nonfinancial, historical, and conservative.
• Historical, conservative, and useful.
• Timely, relevant, and useful.
• Relevant, prospective, and qualitative.

Answer: C

Objective: 4

AACSB: Reflective thinking

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