Managerial Accounting Test Bank

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Chapter 1 Managerial Accounting and the Business Environment
True/False Questions 1. Although financial and managerial accounting differ in many ways, they are similar in that both rely on the same underlying financial data. Answer: True Level: Medium LO: 1 2. Managerial accounting is a branch of financial accounting and serves essentially the same purposes as financial accounting. Answer: False Level: Medium LO: 1 3. Managerial accounting places greater emphasis on the future than financial accounting, which is primarily concerned with the past. Answer: True Level: Easy LO: 1 4. Managerial accounting is not needed in a non-profit or governmental organization. Answer: False Level: Easy LO: 1 5. When carrying out their planning activities, managers select a course of action and specify how the action will be implemented. Answer: True Level: Easy LO: 2 6. When carrying out their planning activities, managers obtain feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change. Answer: False Level: Medium LO: 2 7. The controller occupies a line position in an organization. Answer: False Level: Easy LO: 2 8. Decentralization means the delegation of decision-making authority throughout an organization by allowing managers at various operating levels to make key decisions relating to their own area of responsibility. Answer: True Level: Easy LO: 2

Garrison, Managerial Accounting, 12th Edition

3

Chapter 1 Managerial Accounting and the Business Environment
9. A firm's organization chart will normally show both the formal and informal lines of reporting and communication. Answer: False Level: Easy LO: 2 10. The Chief Financial Officer of an organization is responsible for ensuring that line operations run smoothly. Answer: False Level: Medium LO: 2 11. Traditionally, companies have maintained large amounts of raw…...

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