Chapt

er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

Tr
ue/
Fal
seQuest
ions

1.Manager
ialaccount
ingplacesl
essemphasisonpr eci
sionandmor
eemphasi
s
onfl
exi
bil
it
yandr el
evancethanfi
nanci
alaccount
ing.

Answer
:True AACSB:
Reflect
iveThinki
ng AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPA
FN:MeasurementLO:1 Level:Medium

2.Managerial
account
ingi
snotgov
ernedbygener
all
yaccept
edaccount
ing
pr
inci
ples(GAAP).

Answer:
Tr ue AACSB:Ref
lecti
veThi
nki
ng AI
CPABB: Cri
ti
cal
Thi
nki
ng AI
CPA
FN:Deci
sionMaking,MeasurementLO:1 Level
:Easy

3.Fi
nancial
account
ingandmanagerial
account
ingr
epor
tsmustbeprepar
edi
n
accor
dancewithgener
all
yaccept
edaccounti
ngpri
nci
ples(
GAAP)
.

Answer
:Fal
se AACSB:
Refl
ecti
veThi
nki
ng AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPA
FN:Measur
ementLO:1 Level
:Easy

4.Whencar ryi
ngoutthei
rdi
rect
ingandmot i
vat
ingact
ivi
ti
es,manager
smobili
ze
theorganizat
ion'
shumanandot herr
esour
cessothattheorgani
zat
ion'
spl
ans
arecarri
edout .

Answer
:Tr
ueAACSB:Ref
lect
iveThi
nki
ngAI
CPABB:Resour
ceManagement
,Cr
it
ical
Thi
nki
ng AICPAFN:
Decisi
onMaking LO:
2 Lev
el:
Easy

5.Whencarryi
ngoutpl
anningact
ivi
ti
es,
managersrel
yonf
eedbackt
oensurethat
theplani
sactual
l
ycarr
iedoutandisappr
opr
iatel
ymodi
fi
edascir
cumstances
change.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:2 Level:
Medium

6.Whencarr
yingoutt
hei
rdir
ect
ingandmotiv
ati
ngact
ivi
ti
es,
manager
ssel
ecta
cour
seofacti
onandspeci
fyhowtheact
ionwil
lbei
mplement
ed.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:2 Level:
Medium

Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on 1-
3
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

7.Per
sonsoccupy
ingst
affposi
ti
onspr
ovi
desuppor
tandassi
stancet
oot
her
par
tsoft
heorgani
zat
ion.

Answer:
TrueAACSB:Ref
lect
iveThi
nkingAI
CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

8.St
affdepartment
sgener
all
yhav
edi
rectaut
hor
it
yov
erl
i
nedepar
tment
sinan
or
ganizat
ion.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:2 Level:
Medium

9.I
nformalrel
ati
onshi
psandchannelsofcommuni
cat
ionof
tendev
elopt
hatdo
notappearontheorgani
zat
ionchart
.

Answer
:Tr
ueAACSB:Ref
lect
iveThi
nki
ngAI
CPABB:Resour
ceManagement
,Cr
it
ical
Thi
nki
ng AICPAFN:
Decisi
onMaking LO:
2 Lev
el:
Easy

10.Thecont
roll
er'
sposit
ioni
nar
etai
lcompanyi
sconsi
der
edal
i
neposi
ti
onr
ather
thanast
affposit
ion.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:2 Level:
Medium

11.TheChi
efFinanci
alOffi
cerofanorgani
zat
ionshoul
dpr
esentf
act
sandr
efr
ain
fr
om of
fer
ingadviceandpersonal
opini
on.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:2 Level:
Medium

12.Astr
ategyisagameplanthatenabl
esacompanyt
oat
tractcust
omer
sby
di
sti
nguishi
ngi
tsel
ffr
om competit
ors.

Answer:
Tr ue AACSB:Ref
lect
iveThinki
ng AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPA
FN:Deci
sionMaking LO:2 Level:
Easy

13.Ast
rat
egyr
equi
resef
fect
iveuseofSi
xSi
gmai
mpr
ovementt
echni
ques.

Answer:
False AACSB:Ref
lect
iveThi
nki
ng AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPA
FN:Deci
sionMaking LO:2 Level
:Medi
um

1-
4 Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

14.Acustomerv
alueproposit
ioni
sessenti
all
yareasonforcust
omer
stochoosea
company'
sproduct
sov eri
tscompeti
tor
s'product
s.

Answer:
TrueAACSB:Refl
ect
iveThi
nki
ngAI
CPABB:
Mar
ket
ingAI
CPAFN:
Deci
sion
Making LO:
2 Level
:Easy

15.Cust
omerval
ueproposi
ti
onstendtof
alli
ntothr
eebroadcat
egor
ies-
-cust
omer
i
nti
macy,
operat
ional
excel
lence,
andproductl
eader
ship.

Answer:
TrueAACSB:Refl
ect
iveThi
nki
ngAI
CPABB:
Mar
ket
ingAI
CPAFN:
Deci
sion
Making LO:
2 Level
:Easy

16.Companiesthatadoptacustomerinti
macystr
ategyar
einessencesayi
ngto
thei
rtar
getcustomers,“Ther
easonyoushoul
dchooseusi sbecausewe
underst
andandr espondtoyouri
ndiv
idual
needsbett
erthanourcompeti
tor
s.”

Answer:
TrueAACSB:Refl
ect
iveThi
nki
ngAI
CPABB:
Mar
ket
ingAI
CPAFN:
Deci
sion
Making LO:
2 Level
:Easy

17.Companiesthatchooseanoper at
ional
excell
encestr
ategyar
ei nessence
sayi
ngtotheircust
omer s,
“Chooseusratherthanourcompet
itorsbecausewe
str
ivef
orzerodefects.
”

Answer:
FalseAACSB:Ref
lect
iveThi
nki
ngAI
CPABB:
Mar
ket
ingAI
CPAFN:
Deci
sion
Making LO:2 Lev
el:
Medium

18.Aval
uechainconsi
stsoft
hemaj orbusi
nessf
unct
ionst
hataddv
aluet
othe
company
'sproduct
sandserv
ices.

Answer:
TrueAACSB:Ref
lect
iveThi
nkingAI
CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

19.Effor
tsdesignedtoincr
easet
herat
eofout
putshoul
dgener
all
ybeappl
i
edt
o
theworkstati
onthatist
heconst
rai
nt.

Answer:
TrueAACSB:Ref
lect
iveThi
nkingAI
CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:3 Level
:Easy

Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on 1-
5
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

20.Theleanthi
nki
ngmodel i
safi
vestepmanagementapproachthatorganizes
resour
cessuchaspeopl
eandmachinesaroundt
heflowofbusinessprocesses
andthatpul
lsuni
tst
hrought
hesesprocessesi
nresponsetocustomeror der
s.

Answer:
TrueAACSB:Ref
lect
iveThi
nkingAI
CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:3 Level
:Easy

21.Suppl
ychai
nmanagementinvol
vesacqui
ri
ngandbri
ngi
ngi
nsi
det
hecompany
al
lofthepr
ocessest
hatbr
ingval
uetocustomer
s.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:3 Level:
Medium

22.Anenter
pri
sesyst
em i
ntegr
atesdat
aacrossanor
gani
zat
ionintoasingl
e
sof
twaresyst
em t
hatenabl
esall
employ
eestohavesi
multaneousaccesst
oa
commonsetofdata.

Answer:
TrueAACSB:Refl
ect
iveThi
nki
ngAICPABB:
Lev
eragi
ngTechnol
ogyAI
CPA
FN:Lev
eragi
ngTechnol
ogy LO:3 Lev
el:
Easy

23.Corpor
ategov
ernanceist
helegal
f r
ameworkt
hatal
l
owsmanager
stocont
rol
anddir
ectl
ower-
level
worker
sont hejob.

Answer
:Fal
se AACSB:Refl
ect
iveThi
nking AI
CPABB:
Resour
ceManagement
AI
CPAFN: Deci
sionMaki
ng LO:3 Level:
Medium

24.TheSarbanes-
OxleyActof2002wasintendedtoprotecttheint
erest
soft
hose
whoinvesti
npublicl
ytr
adedcompaniesbyimprov i
ngt herel
i
abil
it
yand
accur
acyofcorporat
efinanci
alr
epor
tsanddisclosures.

Answer:
TrueAACSB:
Ref
lect
iveThi
nki
ngAI
CPABB:
LegalAI
CPAFN:
Measur
ement
LO:3 Level
:Easy

25.TheStandardsofEthicalConductpromulgatedbytheInsti
tut
eofManagement
Accountant
sspecifi
callyst
ates,amongot herthi
ngs,t
hatmanagement
accountant
shav earesponsibi
lit
ytodiscl
osefull
yallr
elevanti
nfor
mati
onthat
couldbereasonabl
ybeexpect edt oi
nfl
uenceani nt
endeduser'
sunder
standi
ng
ofthereport
s,comment sandr ecommendat i
onspresented.

Answer:
True AACSB:Et
hics AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPAFN:
Deci
sion
Making LO:
4 Level
:Easy

1-
6 Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

Mul
ti
pleChoi
ceQuest
ions

26.Manager
ialaccountingplacesconsiderabl
ewei ghton:
A)general
lyacceptedaccount i
ngpr i
ncipl
es.
B)thefi
nancialhist
or yoftheenti
ty.
C)ensuri
ngt hatall
t r
ansacti
onsarepr operl
yrecorded.
D)detai
l
edsegmentr epor
tsaboutdepar t
ment s,pr
oducts,
andcust
omer
s.

Answer
:D AACSB:
Refl
ecti
veThi
nki
ng AI
CPABB:
Cri
ti
cal
Thi
nki
ng AI
CPAFN:
Measur
ementLO:1 Level
:Easy

27.Theplansofmanagementar
eof
tenexpr
essedf
ormal
l
yin:
A)financi
alstat
ements.
B)per f
ormancerepor
ts.
C)budget s.
D)ledgers.

Answer
:C AACSB:
Ref
lect
iveThi
nkingAI
CPABB:
Resour
ceManagementAI
CPA
FN:Measur
ementLO:1 Level
:Easy

28.Thephaseofaccount ingconcer
nedwithpr
ovi
dingi
nfor
mati
ont
omanagersfor
usei
npl anningandcont r
oll
i
ngoperat
ionsandi
ndecisi
onmaki
ngi
scal
led:
A)throughputt i
me.
B)manager i
alaccounti
ng.
C)financialaccount
ing.
D)cont r
olli
ng.

Answer
:B AACSB:
Ref
lect
iveThi
nking AI
CPABB:
Resour
ceManagementAI
CPA
FN:Measur
ementLO:1 Level
:Easy

29.Ast
affposit
ion:
A)rel
atesdirectl
ytot
hecarryi
ngoutofthebasi
cobjecti
vesoft
heor gani
zat
ion.
B)i
ssuppor tiv
einnatur
e,provi
dingser
viceandassi
stancetootherpart
sof
theorganizati
on.
C)i
ssuper i
orinauthori
tyt
oal i
neposit
ion.
D)noneoft hese.

Answer:
B AACSB:Ref
lect
iveThi
nki
ng AICPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on 1-
7
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

30.Foramanufact
uri
ngcompany
,whatt
ypeofposi
ti
on(
li
neorst
aff
)iseachoft
he
fol
lowi
ng?

Managerofa
ManagerofaDat
a Pr
oducti
on
Pr
ocessi
ngDepart
ment Department
A) Staf
f Staf
f
B) Staf
f Line
C) Line Staf
f
D) Line Line

Answer:
B AACSB:Ref
lect
iveThi
nki
ng AICPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

31.A_ _
_ _
_ _
___
_____
_positi
oninanorgani
zat
ionisdir
ectl
yrel
atedt
othe
achievementoftheorgani
zat
ion'
sbasi
cobjecti
ves.
A)l i
ne
B)management
C)st aff
D)Noneoft heabove.

Answer:
A AACSB:Refl
ect
iveThi
nki
ngAI CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

32.__
___
______
_ __isanexampl eofal ineposi
tion.
A)Control
lerforamer chandi
singcompany
B)Chieffi
nancialof f
icerofamer chandi
singcompany
C)Storemanagerf orBestBuy
D)Humanr esourcesmanagerf oracommuni tycol
l
ege

Answer:
C AACSB:Refl
ect
iveThi
nki
ngAI CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

33.Whichofthefol l
owingisNOToneoft
het
hreemaj
orcust
omerv
alue
pr
oposit
ionsdi scussedint
het
ext?
A)customeri ntimacy
B)discountpricing
C)operati
onal excell
ence
D)productleader shi
p

Answer:
B AACSB:Ref
lect
iveThi
nki
ng AICPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

1-
8 Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

34.Whichoft hefoll
owi ngisNOToneoft hefiv
est epsi
ntheleant
hinki
ngmodel
di
scussedi nthet ext?
A)Cont inuouslypur sueperfecti
oninthebusi
nessprocess.
B)Ident i
fyvalueinspeci f
icproducts/
servi
ces.
C)Impl ementanent er
pri
sesy st
em.
D)Cr eateapul lsystem thatrespondstocustomerorder
s.

Answer:
C AACSB:Refl
ect
iveThi
nki
ngAI CPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:2 Level
:Easy

35.Oneconsequenceofachangef rom apusht oaproperl

yimplementedpul
l
pr
oductionsystem canbe:
A)ani ncr
easei nwor ki
npr ocessinv ent
ories.
B)anext remel
ydifficul
tcultur
al changeduet oenforcedi
dlenesswhen
demandf al
l
sbel owpr oducti
oncapaci t
y.
C)ani ncr
easedmi smat chbetweenwhati spr
oducedandwhati sdemanded
bycustomers.
D)ani ncr
easei nr
awmat erial
sinv entor
ies.

Answer:
B AACSB:Anal
yti
c AICPABB:Indust
ry,
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:3 Level
:Har
d

36.Al
lofthefoll
owingarechar act
eristicsofapullproductionsyst
em EXCEPT:
A)Invent
or i
esarereducedt oami nimum bypurchasingr awmater i
alsand
producingunitsonlyasneededt omeetconsumerdemand.
B)Rawmat eri
alsarerel
easedt opr oducti
onfarinadv anceofbeingneededt o
ensurenoi nt
errupt
ionsinwor kf lowsduetoshor t
agesofr awmat eri
als.
C)Productsarecompl etedjustint imetobeshippedt ocustomer s.
D)Manuf actur
edpar t
sar ecompl etedjusti
ntimet obeassembl edi nto
products.

Answer:
B AACSB:Ref
lect
iveThi
nki
ng AICPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:3 Level
:Medium

37.Thefi
vestepf r
ameworkusedt
ogui
deSi
xSi
gmai
mpr
ovementef
for
tsi
ncl
udes
al
lofthefoll
owingEXCEPT:
A)Analyze.
B)Cont r
ol.
C)Digit
ize.
D)Measur e.

Answer:
C AACSB:Refl
ect
iveThi
nki
ngAICPABB:
Resour
ceManagementAI
CPA
FN:Deci
sionMaki
ng LO:3 Level
:Medi
um

Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on 1-
9
Chapt
er1Manager
ial
Account
ingandt
heBusi
nessEnv
ironment

38.TheSarbanes-OxleyActof2002cont ainsal l
ofthef ol
lowi ngprovisi
ons
EXCEPT:
A)Theaudi tcommi t
teeoftheboardofdi rector
sofacompanymusthi r
e,
compensat e,andterminat
ethepubl i
caccount ingfir
mt hataudit
sthe
company '
sf i
nancial
report
s.
B)Financialstatementsmustbeaudi tedonceev erythreey ear
sbyt he
GovernmentAccount ingOffi
ce.
C)Bot htheCEOandCFOmustcer tifyinwr i
ti
ngt hattheircompany 'sfi
nanci
al
stat
ement sandaccompany i
ngdisclosuresfairl
yrepr esenttheresul
tsof
operat
ions.
D)Acompany '
sannual r
eportmustcont ai
nani nternalcont rol
report.

Answer:
B AACSB:Ref
lect
iveThi
nki
ngAI
CPABB:
LegalAI
CPAFN:
Measur
ement
LO:3 Level
:Medi
um

39.TheInstit
uteofManagementAccount ants'Standar dsofEthicalConduct
contai
nsapol i
cyr egardi
ngconfidential
it
yt hatrequi r
esthatmanagement
accountants:
A)r efr
ainfrom di
sclosingconfi
dent i
ali
nf ormationacqui r
edi nthecourseof
thei
rwor kexceptwhenaut horizedbymanagement .
B)r efr
ainfrom di
sclosingconfi
dent i
ali
nf ormationacqui r
edi nthecourseof
thei
rwor kinallsi
tuati
ons.
C)r efr
ainfrom di
sclosingconfi
dent i
ali
nf ormationacqui r
edi nthecourseof
thei
rwor kexceptwhenaut hori
zedbymanagement ,
unlesslegal
lyobli
gat
ed
todoso.
D)r efr
ainfrom di
sclosingconfi
dent i
ali
nf ormationacqui r
edi nthecourseof
thei
rwor kinallcasessincethelawr equirest hem todoso.

Answer:
C AACSB:Et
hicsAI
CPABB:
Cri
ti
cal
Thi
nki
ngAI
CPAFN:
Deci
sionMaki
ng
LO:4 Level
:Har
d

40.Whichofthefol
lowingisNOToneoft
heI
nst
it
uteofManagementAccount
ant
s'
fi
veStandardsofEthi
calConduct
?
A)Compet ence
B)Conf i
denti
ali
ty
C)Independence
D)Integri
ty

Answer:
C AACSB:Et
hicsAI
CPABB:
Cri
ti
cal
Thi
nki
ngAI
CPAFN:
Deci
sionMaki
ng
LO:4 Level
:Medi
um

1-
10 Gar
ri
son/
Nor
een/
Brewer
,Manager
ialAccount
ing,
Twel
ft
hEdi
ti
on