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Testbank

to accompany

Management accounting

4th edition

by
Eldenburg et al.

 

Not for distribution. Instructors may assign selected questions in their LMS.

 

© John Wiley & Sons Australia, Ltd 2020
Chapter 1: The role of accounting information in management decision making

True/false questions

1. A vision statement is a theoretical description of what an organisation should become.

*a. True
b. False

Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

2. An organisational vision is a short-term plan for maximising financial results.

a. True
*b. False

Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

3. Most organisations have one stakeholder.

a. True
*b. False

Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

4. Organisational core competencies unrelated to the organisational vision.

a. True
*b. False

Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

5. Organisational strategies are the tactics that managers use to take advantage of core competencies while working towards the organisational vision.

*a. True
b. False

Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

6. Most organisations have databases that contain information collected formally or informally from internal sources only.

a. True
*b. False

Correct answer: b
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

7. Desirable employee behaviour can be motivated by tying employee performance evaluation and pay to long-term or short-term results.

*a. True
b. False

Correct answer: a
Learning objective 1.1 ~ Recognise the types of decisions managers make for an organisation

8. Organisational information systems only collect accounting information.

a. True
*b. False

Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

9. Cost accounting information is used for both management accounting and financial accounting activities.

*a. True
b. False

Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

10. Management accounting is the process of gathering, summarising and reporting financial and non-financial information used internally to make decisions.

*a. True
b. False

Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

11. Intellectual capital is a type of financial resource that is captured by the organisation’s information system.

a. True
*b. False

Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

12. It is easy to differentiate between internal and external reports.

a. True
*b. False

Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

13. The design of the management accounting system structure is influenced by both external and internal factors.

*a. True
b. False

Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

14. Technological advances have allowed management accountants to develop previously infeasible cost and management accounting systems.

*a. True
b. False

Correct answer: a
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

15. GAAP stands for generally agreed accounting practices.

a. True
*b. False

Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making

16. Only large established organisations require a management accounting function.

a. True
*b. False

Correct answer: b
Learning objective 1.2 ~ Discuss the role of cost and management accounting information in management decision making