Management Accounting Information for Decision Making 7th edition by Atkinson Test bank
D) "If I can't measure it, I can't manage it."
Answer: C
LO5
Terms: Nonfinancial information
Difficulty: 1
- When a change is introduced, employees tend to:
B) be indifferent to the change.
C) exhibit no change in behavior.
D) resist the change.
Answer: D
LO5
Terms: Nonfinancial information
Difficulty: 2
- The introduction of a new management accounting system is MOST likely to motivate UNWANTED employee behavior when it is used for:
B) planning.
C) decision making.
D) coordinating individual efforts.
Answer: A
LO5
Terms: Financial information, nonfinancial information
Difficulty: 2
- Managers are MOST likely to feel outside pressure to influence the numbers favorably when the information is used for:
B) compensation and promotions.
C) continuous improvement.
D) product costing.
Answer: B
LO5
Terms: Nonfinancial information, Hawthorne study
Difficulty: 2
- The Hawthorne study revealed that:
B) groups alter their behavior when they know they are being studied.
C) People react when they are being measured.
D) All of the above are correct.
Answer: D
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Exercises, Problems & Short Answer
LO1
Terms: Management accounting, financial accounting
Difficulty: 2
1. Compare and contrast the users and uses of management accounting and financial accounting.
Answer:
Management accounting provides information to internal decision makers of the business such as line supervisors, division managers and top executives. Its purpose is to help managers plan, organize, control and make operating decisions by predicting future results and evaluating performance.
Financial accounting provides information to external decision makers such as investors and creditors. Its purpose is to present a fair picture of the financial condition of the company for use by these parties in making investing and credit decisions.
LO1
Terms: Management accounting
Difficulty: 2
2. What are the main roles of management accounting?
Answer:
Management accounting gathers short-term and long-term financial and nonfinancial information to help managers plan, coordinate, motivate, improve, control, and evaluate success factors of an organization. Management accounting converts data into usable information that supports planning, organizing, and control decision making.
LO2
Terms: Evolution of management accounting
Difficulty: 3
3. What role has the increasingly competitive business environment played in the development of management accounting?
Answer:
The competitive environment has changed dramatically. The deregulation movement in North America and Europe during the 1970s and 1980s changed the ground rules under which service companies operate. In addition, organizations encountered severe competition from overseas companies that offered high-quality products at low prices. This led to an improvement of operational control systems such that information is more current and provided more frequently. Employees need better management accounting information and accurate and timely information to improve the activities they perform and to make decisions. Employees also want innovations in management accounting information. Nonfinancial information has become a critical feedback measure. Finally, the focus of many firms is now on measuring and managing activities.