Accounting for Managers Ed 1st

Chapter 01
Introduction to Managerial Accounting

True / False Questions

1. Financial accounting information is generally used exclusively by internal parties such as managers.
True False

2. Financial accounting information is prepared according to generally accepted accounting principles.
True False

3. Managerial accounting information includes such items as budgets, performance evaluations, and cost reports.
True False

4. Financial accounting information is reported for the company as a whole.
True False

5. Investors, creditors and regulators are the primary users of managerial accounting information.
True False

6. The planning function is the arranging of the necessary resources to carry out the plan.
True False

7. The control function is comparing actual with budgeted results and taking corrective action when needed.
True False

8. The directing/leading function provides motivation to achieve results.
True False

9. When you incur a cost you give up something in exchange for something else.
True False

10. Cost is always measured in financial value.
True False

11. Out-of-pocket costs involve an actual outlay of cash.
True False

12. Opportunity costs involve an actual outlay of cash.
True False

13. Whether a cost is treated as direct or indirect depends on whether tracing the cost is either possible or feasible.
True False

14. An indirect cost can be readily traced to a cost object while a direct cost is traced only to manufacturing costs.
True False

15. Variable costs are always direct costs.
True False

16. Fixed costs stay the same, on a per-unit basis, as activity level changes.
True False

17. Fixed costs stay the same, in total, as activity level changes.
True False

18. Prime costs include direct materials, direct labor, and