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Test Bank for Managerial Accounting 4th Edition By Charles Davis & Elizabeth Davis, ISBN: 9781119577669, All 13 Chapters Covered, Verified Latest Edition$20.49
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Test Bank for Managerial Accounting 4th Edition By Charles Davis & Elizabeth Davis, ISBN: 9781119577669, All 13 Chapters Covered, Verified Latest Edition
Test Bank for Managerial Accounting 4th Edition By Charles Davis & Elizabeth Davis, ISBN: 9781119577669, All 13 Chapters Covered, Verified Latest Edition Test Bank for Managerial Accounting 4th Edition By Charles Davis & Elizabeth Davis, ISBN: 9781119577669, All 13 Chapters Covered, Verified Latest...
There are several formal definitions of managerial accounting. A simple one is “th
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egeneration of relevant information to support management’s decision-
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making activities.” QW
2. Describe the differences between managerial and financial accounting
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(Unit 1.1) QW
Managerial accounting’s primary users are managers and decision makers within an or
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ganization, whereas financial accounting is aimed primarily at external users. Unlike GA
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AP that guides financial accounting, there are no mandated rules in managerial accoun
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ting. Managerial accounting reports focus on operating segments, while financialaccou
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nting statements report results for the organization as a whole. Managerial accounting
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is concerned more with projecting future results than reporting past results. Manageria
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l information is prepared to take advantage of a window of opportunity, evenif some a
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ccuracy must be sacrificed. Financial accounting information is balanced to the penny a
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nd is delivered after the end of the accounting period.
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3. List and describe the four functions of managers (Unit 1.1)
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Planning means setting a direction for the organization. Long-
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term, or strategic planningprovides direction for a five- to ten-year period. Short-
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term or operational planning provides more detailed guidance for the coming year; it t
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ranslates the company’s strategy into action steps. Controlling is the monitoring of day
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-to-
day operations to identify any problems that require corrective action. Evaluating is th
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e process of comparing a particular period’s actual results to planned results, for the p
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urpose of assessing managerial performance. Decision making means choosing betwee
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n alternative courses of action.
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4. Explain how the selection of a particular business strategy determines the
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information that managers need to run an organization effectively (Unit 1 QW QW QW QW QW QW QW QW QW QW
.2)
To run a business effectively, managers need information that shows how well oper
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ations are meeting the organization’s strategic goals. For instance, if the organizatio
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n’s strategy is to be a low-
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cost producer, information about product costsand cost variances will be more usef
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ul to managers than information about researchand development.
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, 1-4 Test Bank for Davis & Davis, Managerial Accounting, 4/
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e
5. Discuss the importance of ethical behavior in managerial accounting (Unit
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1.3)
Ethical behavior means knowing right from wrong and then doing the right thing. Man
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ycompanies and most professional organizations have codes of conduct to guide empl
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oyees’ actions. Acting unethically can lead to illegal activity and ultimately to the destr
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uction of the firm. Furthermore, research has shown that a public commitment toethi
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cal behavior can lead to superior financial performance.
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