Question 1

Managerial information is for external as well as internal stakeholders.

Accepted Answer

Managerial information is primarily intended for internal stakeholders, such as managers and employees, to help in planning, controlling, and decision-making processes within an organization. External stakeholders typically rely on financial information.

Question 2

Managers use managerial information to evaluate performance of a company's operation.

Accepted Answer

Managers need information about company's operation to evaluate performance, make decisions and plan strategies. The information they use is often referred to as managerial information, which includes financial reports, sales figures, production data, customer feedback, and other metrics that help determine how well the company is performing, and where improvements can be made or changes implemented.

Question 3

A staff department or unit is one that provides services, assistance, and advice to the departments with line or other staff responsibilities.

Accepted Answer

A staff department or unit exists to support and provide services to other departments with line or staff responsibilities.

Question 4

Managerial accounting reports must be useful to the user of the information.

Accepted Answer

Managerial accounting reports are prepared for internal use by the management of a company. The reports must be useful and relevant to the specific user of the information, providing insights and aiding decision-making. Otherwise, they will not be effective in supporting management’s objectives.

Question 5

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Accepted Answer

The statement accurately describes the responsibilities of the management accountants working under the controller.

Question 6

A report analyzing how many products need to be sold to cover operating costs is not typically a managerial accounting report.

Accepted Answer

A report analyzing how many products need to be sold to cover operating costs is a common example of a managerial accounting report. This type of report helps managers make decisions about pricing, production levels, and cost-saving measures.

Question 7

Planning is the process of monitoring operating results and comparing actual results with the expected results.

Accepted Answer

Planning is the process of establishing goals, formulating strategies, and developing plans to coordinate activities. Monitoring operating results and comparing actual results with the expected results is part of the controlling function.

Question 8

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Accepted Answer

Managerial accounting is flexible and allows organizations to design their own systems based on their specific needs and goals. This provides room for innovation and adaptation as circumstances change.

Question 9

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

Accepted Answer

This is a correct definition of planning.

Question 10

Controlling deals with choosing goals and deciding how to achieve them.

Accepted Answer

Controlling involves monitoring the progress towards goal achievement and taking corrective action when needed. Choosing goals and deciding how to achieve them is part of planning.

Question 11

Managerial accounting uses only past data in reports to aid management in the decision-making process.

Accepted Answer

Managerial accounting uses both past and present data to aid management in the decision-making process. It also often includes projections and forecasts for the future.

Question 12

In most business organizations, the chief accountant is called the treasurer.

Accepted Answer

The chief accountant is typically called the chief financial officer (CFO) or the controller in business organizations, while the treasurer is responsible for managing the organization's financial resources, such as cash, investments, and debt.

Question 13

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

Accepted Answer

This statement accurately defines the concept of controlling.

Question 14

A staff department has no direct authority over a line department.

Accepted Answer

A staff department provides support, advice, and expertise to line departments but does not have direct authority over them. Line departments are responsible for the primary functions and activities of the organization, such as production or sales.

Question 15

The vice presidents of production and sales and the controller hold line positions in most large organizations.

Accepted Answer

In most large organizations, the vice presidents of production and sales hold line positions because they are directly involved in the core activities that generate revenue for the company. However, the controller typically holds a staff position, as this role involves overseeing financial reporting and budgeting, supporting the line positions with information and analysis rather than being directly involved in producing or selling the company's products or services.

Question 16

A report analyzing the dollar savings of purchasing new equipment to speed up the production process is a managerial accounting report.

Accepted Answer

This report involves analyzing the potential cost savings of a proposed investment in new equipment, which is a typical topic for managerial accounting reports.

Question 17

Managerial accounting information includes both historical and estimated data.

Accepted Answer

Managerial accounting information includes both past financial data, as well as estimated data for future planning and decision-making purposes.

Question 18

Managerial accounting reports must be prepared according to generally accepted accounting principles.

Accepted Answer

Managerial accounting reports are not required to be prepared according to generally accepted accounting principles, as they are internal reports used for decision-making by management and do not need to adhere to external reporting standards.

Question 19

A diagram of the operating structure of an organization is called an organization chart.

Accepted Answer

An organization chart is a visual representation of the operating structure of an organization, identifying the roles and hierarchy of positions within the company.

Question 20

In most business organizations, the chief management accountant is called the controller.

Accepted Answer

In most business organizations, the chief management accountant is responsible for the preparation of financial statements and reports, and is commonly referred to as the controller.

Quiz 18: Introduction to Managerial Accounting