Test Bank For Managerial Accounting Stacey Whitecotton 4th Edition

Managerial Accounting, 4e (Whitecotton)

Chapter 1 Introduction to Managerial Accounting 

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

Answer: FALSE

Explanation: Financial accounting information is used by external parties; managerial accounting information is used by internal business owners and managers.

Difficulty: 1 Easy

Topic: Comparison of financial and managerial accounting

Learning Objective: 01-01 Describe the key differences between financial accounting and managerial accounting.

Bloom’s: Remember

AACSB: Analytical Thinking

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2) Financial accounting information is reported for the company as a whole.

Answer: TRUE

Explanation: Financial accounting information is provided at the company-wide level.

Difficulty: 1 Easy

Topic: Comparison of financial and managerial accounting

Learning Objective: 01-01 Describe the key differences between financial accounting and managerial accounting.

Bloom’s: Remember

AACSB: Analytical Thinking

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3) Managers must direct, lead and motivate during the implementation function.

Answer: TRUE

Explanation: Directing/leading involves putting the plan into action, and motivating others to work toward the plan’s success, and it is a key part of putting a plan into action (implementation).

Difficulty: 1 Easy

Topic: Functions of Management

Learning Objective: 01-02 Describe how managerial accounting is used in different types of organizations to support the key functions of management.

Bloom’s: Remember

AACSB: Analytical Thinking

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4) Managers of small, private corporations use managerial accounting information whereas managers of large, public corporations use financial accounting information.

Answer: FALSE

Explanation: Managerial accounting information is used by managers in all types of organizations: large and small, public and private, profit and nonprofit.

Difficulty: 1 Easy

Topic: Functions of Management

Learning Objective: 01-02 Describe how managerial accounting is used in different types of organizations to support the key functions of management.

Bloom’s: Remember

AACSB: Analytical Thinking

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5) The Sarbanes-Oxley Act of 2002 places full responsibility on the board of directors for the accuracy of the reporting system.

Answer: FALSE

Explanation: SOX places more responsibility on all managers (not just accountants) for the accuracy of the reporting system. SOX also places additional responsibilities on the boards of directors and external auditors to reduce the opportunity for errors and fraud.

Difficulty: 2 Medium

Topic: Ethics and the Sarbanes-Oxley Act

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Understand

AACSB: Analytical Thinking

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6) The Sarbanes-Oxley Act of 2002 focuses on three factors that affect the accounting reporting environment: ethics, fraud, and managers.

Answer: FALSE

Explanation: The Sarbanes-Oxley Act of 2002 focuses on three factors that affect the accounting reporting environment: opportunity, incentives, and character.

Difficulty: 2 Medium

Topic: Ethics and the Sarbanes-Oxley Act

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Understand

AACSB: Ethics

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7) A sustainable business is one with the ability to meet the needs of today without sacrificing the ability of future generations to meet their own needs.

Answer: TRUE

Explanation: In the context of business “sustainability” means the ability to meet the needs of today without sacrificing the ability of future generations to meet their own needs.

Difficulty: 1 Easy

Topic: Sustainability Accounting

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Remember

AACSB: Ethics

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8) The term “Big data” refers to the volume, velocity and veracity of data.

Answer: FALSE

Explanation: Veracity is a synonym for accuracy, which is not one of the characteristics of big data. The 3 characteristics of “Big data” are volume, velocity, and variety

Difficulty: 1 Easy

Topic: Decision Analytics

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Remember

AACSB: Analytical Thinking

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9) Predictive analytics is the process of recommending a course of action based upon meaningful patterns and insights from collected data.

Answer: FALSE

Explanation: Prescriptive analytics, not predictive analytics, recommends courses of action

Difficulty: 1 Easy

Topic: Decision Analytics

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Remember

AACSB: Analytical Thinking

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10) Descriptive analytics uses patterns and insights from collected data to show what has happened.

Answer: TRUE

Explanation: Descriptive analytics describes what has happened.

Difficulty: 1 Easy

Topic: Decision Analytics

Learning Objective: 01-03 Describe the importance of ethics, sustainability, and decision analytics in managerial accounting.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation