Test Bank For
Management Accounting 6th Edition by Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
Chapter 1-19 Answers are at the End of Each Chapter
Chapter 1
Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) In a decentralized organization, most decisions are made by top management.
⊚ true
⊚ false
2) Budgets are a formal expression of management's plans.
⊚ true
⊚ false
3) Large batches are desirable because they minimize work in process inventories.
⊚ true
⊚ false
4) When carrying out controlling activities, managers rely on feedback to ensure that the plan is
actually carried out and is appropriately modified as circumstances change.
⊚ true
⊚ false
5) A performance report typically compares budgeted data to actual data.
⊚ true
⊚ false
6) When carrying out directing and motivating activities, managers rely on feedback to ensure
that the plan is actually carried out and is appropriately modified as circumstances change.
⊚ true
⊚ false
7) The focus of management accounting is on the past, since historical cost data are generally
accurate and reliable.
⊚ true
⊚ false
,8) Management accounting is concerned with providing information to accounts payables and
others outside of an organization.
⊚ true
⊚ false
9) Successful implementation of JIT should result in resources being freed up for more
productive uses.
⊚ true
⊚ false
10) When carrying out their planning activities, managers mobilize the organization's human and
other resources so that the organization's plans can be carried out.
⊚ true
⊚ false
11) Management accounting is governed by generally accepted accounting principles (GAAP).
⊚ true
⊚ false
12) A line position is one that is directly related to the achievement of the basic objectives of an
organization.
⊚ true
⊚ false
13) A person in a staff position is directly involved in achieving the basic objectives of the
organization.
⊚ true
⊚ false
14) Non-monetary data can be very useful for management accounting.
⊚ true
⊚ false
15) The informal organizational structure plays no real part in the management of a decentralized
organization.
⊚ true
⊚ false
,16) Financial accounting suffered in the latter part of the 20th Century due to the emphasis on
management accounting.
⊚ true
⊚ false
17) The quality of a company's management accounting system is irrelevant to a company's
success.
⊚ true
⊚ false
18) The pace of innovation in the business world has been easy for employees to deal with.
⊚ true
⊚ false
19) The pace of innovation in the business world has been easy for businesses to deal with.
⊚ true
⊚ false
20) The pace of innovation in the business world has been good for consumers.
⊚ true
⊚ false
21) Service industries provide different challenges for management accounting than do
manufacturing industries.
⊚ true
⊚ false
22) Shared service centres provide support services for a corporation and are usually
concentrated in a single geographical location.
⊚ true
⊚ false
23) Shared service centres are places where the support services of an entire corporation are
concentrated in a single geographical location.
⊚ true
⊚ false
24) Ethical standards have nothing to contribute to profitable business practices.
⊚ true
⊚ false
, MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
25) Management accounting primarily is concerned with providing:
A) information to managers inside the organization as well as information to
shareholders, creditors, and others outside the organization.
B) information to shareholders, accounts payables, and others outside the organization.
C) information to managers inside the organization.
D) information to governmental regulatory agencies.
26) CIMA is:
A) generally not involved in ethical issues.
B) not involved in transfer pricing issues.
C) required to recommend accountants to focus on short term performance.
D) responsible for monitoring and enforcing professional ethics.
27) Reductions in trade barriers:
A) do not help companies to expand.
B) reduce the risk of business failure.
C) are good for all companies.
D) help agile and aggressive companies to expand.
28) Financial accounting:
A) is required by regulatory bodies such as the SEC.
B) has its primary emphasis on the future.
C) provides data primarily for internal use by managers.
D) is concerned primarily with the performance of segments rather than with the
performance of the entire organization.
29) The organization chart:
A) shows lines of authority within an organization.
B) shows summaries of financial consequences of past activities.
C) shows both formal and informal channels of communication between managers.
D) None of these.
30) Financial and managerial accounting are similar in that both:
A) are mandatory.
B) rely on financial data.
C) emphasize the relevance and flexibility of data.
D) emphasize the organization as a whole.
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