TEST I. MODIFIED TRUE OR FALSE.. IF FALSE explain why...

1. Accounting exists to provide reliable information on an organization's economic activities to

interested individuals, both inside and outside the organization.

2. Managerial accounting is the branch of accounting concerned with reporting to external parties for

decision making purposes.

3. Organizations may never exist within organizations.

4. Objectives will not vary depending on whether the organization is profit-seeking, like general motors,

or non-profit and service-oriented, like the city government.

5. Profit-seeking organizations generally aim to provide goods and services in such a way as to earn

an acceptable rate of return on the owners' investment.

6. Objectives, tend to be narrow, specific statements.

7. Planning is the process of seeking out alternative courses of action, evaluating them and deciding

which actions to take to attain the organization's stated goals and objectives.

8. Organizing is the delegating of responsibility for the use of the organization's resources, whether

human, financial, or physical.

9. Organization charts specify only informal relationships among individuals in the organizations

10.Line positions are those which involve direct responsibility for the creation and delivery of the

organization's goods and services to customers.

11.Staff positions are those which do not support line positions.

12.Purchasing department managers in staff positions decide what products to sell at what prices(and

therefore what products need to be purchased

13.Implementation is the process of getting the people to work effectively and efficiently.

14.Controlling is the process of ensuring that management plan is successfully implemented.

15.Accounting reports do not play an important part in the control process.

16.The controller is the person in-charge of accounting services.

17.The controller is responsible for the company's financial activity and is the prime decision maker in

choosing among financial alternatives.

18.Financial accounting deals with information that is reported to individuals outside the organization.

19.Managerial accounting specifically deals with information that is collected and analysed for those

inside the organization.

20.External reports need not conform with generally accepted accounting principles

21.External reports prepared by an organization's accountants are audited by independent CPAs.

22.Managerial accounting may be thought of as the reporting of past financial performance and

financial accounting as the estimation of future financial outcomes.

23.Whereas financial accounting reports tend to cover the financial activities of a company as a whole,

managerial accounting reports tend to be specific to product lines, divisions, sales territories, or

customers grouped by peso volume of sales orders.

24.Accounting information is an economic commodity.

25.Objectives tend to be broad, general statements.

26.Plans are devised after goals and objectives are defined.

27.Line positions are those involve assembly line activities.

28.Staff positions are positions which support those in line positions.

29.The treasurer's major duties include: providing operating capital for long-term financing; maintaining

shareholder relations; short-term financing.

30.Managerial accounting reports are very similar to financial accounting reports