entr 12 pt 2

Variable costs decrease if output increases.

False

Which of the following is not something a manager needs in order to make good decisions?

A good support system.

_____ is an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service.

Activity-based cost estimates

Expendables are necessarily fixed costs.

False

Which of the following is true of theories based on the bounded rationality models?

It assumes that people are inefficient processors of information.

________ information and reports are used when planning, organizing, staffing, directing, and controlling.

Managerial accounting

Cash flow statements can be either direct statements or indirect statements.

True

Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations.

True

One of the difficulties in understanding and interpreting the income statements is the dispute over when one should recognize revenues.

True

A financial plan for the future based on a single level of operations is called a(n):

budget

Eddie, the owner of a fast-food joint, finds that he spends far lesser when he bakes breads in dozens than when he bakes two or three loafs at a time. This idea of Eddie's is similar to the concept of:

economy of scale.

Financial flexibility of a business is a matter of judgment, whereas financial strength is an objective assessment.

false

Statement of cash flows is also referred to as the statement of financial position.

false

The primary purpose of managerial accounting is to ________.

support good decision making

The process of determining the effect of price and quantity changes on revenues and expenses refers to:

variance analysis.