Horngren's Managerial Accounting Test Bank 7th Edition Miller-Nobles – Complete Verified Solutions

This extensive test bank accompanies Horngren's Financial & Managerial Accounting: The Managerial Chapters, 7th Edition by Tracie L. Miller-Nobles and Brenda L. Mattison (ISBN: 978-1292412337). Designed to reinforce core managerial accounting concepts and prepare students for exams, this resource contains thousands of practice questions with verified answers and detailed rationales. TEST BANK for Horngren’s Financial and Managerial Accounting: Managerial Chapters 7th Edition (L. Miller-Nobles & Benda L. Mattson Chapter M:1 Introduction to Managerial Accounting 1) Financial and managerial accounting both provide useful information, but each has a different emphasis. Briefly distinguish between financial and managerial accounting as they relate to the 1) primary users, 2) purpose of information, and 3) focus and time dimension of the information. Answer: The primary users of financial information are parties external to the company , while the primary users of managerial information are internal parties such as managers and staff of the company. Financial information helps investors and creditors make investment and credit deci-sions, while managerial information assists managers and employees to plan, direct and control the company's operations. The focus of financial information is on the past, ensuring relevant and faithfully representative information, while managerial information is focused on providing rele-vant information for future decisions. Diff: 2 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Measurement PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 2) For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA): Statement Applies to MA or FA How reports will affect employee behavior is a concern. Summary reports are prepared primarily on the company as a whole, usually on a quarterly or annual basis. Relevant information and focus on the future. Primary users include investors, creditors, and government authorities. There is no requirement to follow GAAP. Answer :Statement Applies to MA or FA How reports will affect employee behavior is a concern. MA Summary reports are prepared primarily on the company as a whole, usually on a quarterly or an-nual basis. FA Relevant information and focus on the future. MA Primary users include investors, creditors, and government authorities. FA There is no requirement to follow GAAP. MA Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 3) A company's organizational chart shows the relationships between departments and divisions and the managers that are responsible for each section. Answer: TRUE Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 4) Most companies structure their organizations along departments or divisions. Answer: TRUE Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 5) A company's president or chief executive officer (CEO) is selected by the stockholders. Answer: FALSE Explanation: The president is selected by the Board of Directors. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 6) Staff positions are directly involved in providing goods or services to customers. Answer: FALSE Explanation: Line positions are directly involved with customers. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 7) The chief financial officer, controller, and treasurer are all examples of staff positions. Answer: TRUE Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 8) Which of the following functions might be classified as a staff position as opposed to a line position? A) Division Manager B) Production Manager C) Sales Manager D) Payroll Processing Manager Answer: D Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 9 The officer of the company who has the ultimate responsibility for implementing the company's long and short-term goals is the . A) Chief Financial Officer B) Chair of the Board C) Chief Executive Officer D) Chief Officer for Human Relations Answer: C Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 10 Which of the following functions might be classified as a staff position as opposed to a line position? A) Chief Executive Officer B) Chief Operating Officer C) Division Manager D) Treasurer Answer: D Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 11) Which of the following functions might be classified as a line position as opposed to a staff position? A) Chief Operating Officer B) Controller C) Payroll Processor D) Treasurer Answer: A Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 12) Which of the following functions might be classified as a staff position as opposed to a line position? A) Chief Financial Officer B) Chief Operating Officer C) Division Manager D) Chief Executive Officer Answer: A Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Managers' Role in the Organization 13) Managerial accounting focuses on providing information for internal planning and control. Answer: TRUE Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 14) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders. Answer: FALSE Explanation: The reverse is true. Financial accounting serves external stakeholder information needs while managerial accounting serves the needs of managers and internal staff. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 15) Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects. Answer: FALSE Explanation: Financial statements provide mostly historical information; relevant and faithfully representative information and focused on the past. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 16) Managerial accounting reporting by a public firm is required to follow the rules of GAAP. Answer: FALSE Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of usefulness to management for decision making purposes. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 17) Financial reporting is typically much more detailed than managerial accounting. Answer: FALSE Explanation: Financial reporting is typically less detailed than managerial accounting information. Financial accounting reporting is usually summary reports, prepared primarily on the company as a whole, usually on a quarterly or annual basis. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 18) Managerial accounting provides financial statements that report results of operations, financial position, and cash flows both to managers and to external stockholders. Answer: FALSE Explanation: Managerial accounting provides the information needed to plan and control operations and therefore serves the information needs of internal parties such as managers and staff. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 19) Which of the following is a focus of managerial accounting? A) to generate a company's financial statements for tax reporting B) to provide information to business managers to assist them in controlling their businesses C) to provide information to shareholders to assist them with their investment decisions D) to ensure that the reports produced for internal and external business purposes are GAAP compliant Answer: B Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 20) Which of the following statements is true of managerial accounting? A) The external stakeholders of a company are the primary users of managerial accounting. B) Managerial accounting information is used to help managers plan, direct and control their operations. C) An external audit by an independent CPA is required for managerial accounting information. D) Managerial accounting information must comply with Generally Accepted Accounting Principles. Answer: B Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 21) Managerial accounting information for a company is primarily used by . A) its customers to understand the pricing of the product B) its creditors to understand the credibility of the business C) its employees to plan, direct and control operations D) its investors to make their investment decisions Answer: C Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1) 22) Which of the following statements is true of financial accounting? A) It provides information to investors needed for their investment decisions. B) It provides future focused information needed for managing and delegating operations. C) It focuses on detailed reports for parts of the company rather than the whole company. D) It focuses on planning, directing and controlling day-to-day operations. Answer: A Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1)