Management Accounting and Management Decisions

Management Accounting, Cdn. 6e (Horngren/Sundem/Stratton/Beaulieu)
Chapter 1 Management Accounting and Management Decisions

1) Both internal managers and external parties use accounting information.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 16
Objective: 8

2) Internal accounting reports must follow generally accepted accounting principles and account for assets at historical cost.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 16
Objective: 8

3) Organizations that do not make or sell tangible goods are called service organizations.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 7
Objective: 3

4) The cost-benefit balance is the primary consideration in choosing among accounting systems and methods.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 2
Objective: 3

5) Planning refers to setting objectives, implementing plans, and evaluating objectives.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 3
Objective: 2

6) A budget is a quantitative expression of a plan of action.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 2
Objective: 3

7) Management by exception involves a detailed analysis of all deviations from planned performance regardless of the amount.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 2
Objective: 3

8) Sales growth occurs in the mature market stage of product life cycle.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 9
Objective: 4

9) Line authority is authority exerted downward over subordinates.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 12
Objective: 5

10) Line departments support or service staff departments.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 12
Objective: 5

11) According to the Financial Executives Institute, the controller's function is to obtain both short-term and long-term loans.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 14

12) The CMA program focuses on management accounting and its role