Chapter 1--Managerial Accounting Concepts and Principles Key 1. Accounting is an information system that provides essential data about the economic activities of an entity to various users to aid them in making informed judgments and decisions.
TRUE

2. Managerial accounting reports are prepared according to generally accepted accounting principles.
FALSE

3. Managerial accounting information includes both historical and estimated data.
TRUE

4. 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.
TRUE

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

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

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

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

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

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

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

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

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

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

15. Control is the process of