Financial and Managerial Accounting: Managerial Chapters, 7th Edition (Miller-Nobles) – Complete Test Bank (Chapters 1–11)

TEST BANK /f




Financial and Managerial Accounting:
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Managerial Chapters, 7th Edition
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(Miller-Nobles) Chapter 1-11
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,Chapter M:1 Introduction to Managerial Accounting
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Learning Objective M:1-1 /f /f




1) Managerial accounting focuses on providing information for internal planning and
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control.Answer: TRUE
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting

PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
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providesinformation to external stakeholders.
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Answer: FALSE / f


Explanation: The reverse is true. Financial accounting serves external stakeholder information
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needswhile managerial accounting serves the needs of managers and internal staff.
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting

PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

3) Financial statements prepared for investors and creditors often include forward-looking
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informationbecause they make decisions based on a company's future prospects.
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Answer: FALSE / f


Explanation: Financial statements provide mostly historical information; relevant and
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faithfullyrepresentative information and focused on the past.
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting


PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

4) Managerial accounting reporting by a public firm is required to follow the rules of
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GAAP.Answer: FALSE
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Explanation: Managerial accounting information is not guided by GAAP but rather by the concept
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ofusefulness to management for decision making purposes.
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:

/ f Reporting


PE /fQuestion /fType: / f Concept

,H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)




5) Financial reporting is typically much more detailed than managerial
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accounting.Answer: FALSE
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Explanation: Financial reporting is typically less detailed than managerial accounting information.
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Financial accounting reporting is usually summary reports, prepared primarily on the company as
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awhole, usually on a quarterly or annual basis.
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting


PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

6) Managerial accounting provides financial statements that report results of operations,
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financialposition, and cash flows both to managers and to external stockholders.
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Answer: FALSE / f


Explanation: Managerial accounting provides the information needed to plan and control operations
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andtherefore serves the information needs of internal parties such as managers and staff.
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting

PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

7) Which of the following is a focus of managerial accounting?
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A) to generate a company's financial statements for tax reporting
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B) to provide information to business managers to assist them in controlling their businesses
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C) to provide information to shareholders to assist them with their investment decisions
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D) to ensure that the reports produced for internal and external business purposes are GAAP
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compliantAnswer: B
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Diff: /f1
LO: / f M:1-1
AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting


PE /fQuestion /fType: / f Concept
H2: / f Why /fIs /fManagerial /fAccounting /fImportant? /f(H1)

8) Which of the following statements is true of managerial accounting?
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A) The external stakeholders of a company are the primary users of managerial accounting.
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B) Managerial accounting information is used to help managers plan, direct and control their operations.
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C) An external audit by an independent CPA is required for managerial accounting information.
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D) Managerial accounting information must comply with Generally Accepted Accounting
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Principles.Answer: B
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Diff: /f1
LO: / f M:1-1

, AACSB: / f Application /fof
/fknowledge/A f ICPA /fFunctional:


/ f Reporting