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CH1

EXERCISE 1–1 The Roles of Managers and Management Accountants [LO1]

Six terms that relate to organizations, the work of management, and the role of managerial accounting are listed below:

Decentralization Controller

Line Organization chart

Staff Chief financial officer

Choose the term above that most appropriately completes the following statements:

1. A position that is directly related to achieving the basic objectives of an organization is called a line position.

2. A diagram that shows how responsibility is divided among managers and shows the formal lines of reporting and communication is called an organization chart .

3. A staff position provides service or assistance to other parts of the organization and does not directly achieve the basic objectives of the organization.

4. The delegation of decision-making authority throughout an organization by allowing managers at various operating levels to make key decisions relating to their area of responsibility is called decentralization.

5. The manager in charge of the accounting department is generally known as the controller .

6. The CFO is the member of the top management team who is responsible for providing timely and relevant data to support planning and control activities and for preparing financial statements for external users.

EXERCISE 1–3 Ethics in Business [LO3]

Mary Karston was hired by a popular fast-food restaurant as an order-taker and cashier. Shortly after taking the job, she was shocked to overhear an employee bragging to a friend about short-changing customers. She confronted the employee who then snapped back: “Mind your own business. Besides, everyone does it and the customers never miss the money.” Mary didn’t know how to respond to this aggressive stance.

Required:

What would be the practical consequences on the fast-food industry and on consumers if cashiers generally shortchanged customers at every opportunity?...