BUS-A 207 - INTRODUCTION TO MANAGERIAL ACCOUNTING: HONORS
| EXAM QUESTIONS AND CORRECT ANSWERS | VERIFIED
MANAGERIAL ACCOUNTING LATEST 2026/2027
BUS-A 207: Introduction to Managerial Accounting: Honors (3 cr.)
1. Which group is the primary user of managerial accounting information?
A. Creditors and lenders
B. Internal managers of the organization
C. Government regulators
D. External shareholders
ANSWER : B. Internal managers of the organization
Explanation: Managerial accounting is designed to meet the information
needs of managers inside the organization, while financial accounting
serves external parties.
2. Which of the following is a characteristic of managerial accounting rather
than financial accounting?
A. It must follow generally accepted accounting principles
B. It is reported to outside investors on a quarterly basis
C. It focuses on the organization as a whole
D. It places emphasis on decisions that affect the future
ANSWER : D. It places emphasis on decisions that affect the future
Explanation: Managerial accounting is forward-looking and supports
decision making. The other choices describe financial accounting.
BUS-A 207 Practice Examination | Page 1
,3. Managerial accounting reports prepared for internal use are:
A. Not required to follow GAAP
B. Audited each year by independent CPAs
C. Filed with the Securities and Exchange Commission
D. Required to follow IFRS
ANSWER : A. Not required to follow GAAP
Explanation: Because the reports are used internally, managers may
design them in whatever form best serves their decisions.
4. Which management function involves establishing goals and preparing
budgets?
A. Controlling
B. Directing and motivating
C. Planning
D. Auditing
ANSWER : C. Planning
Explanation: Planning means selecting a course of action and specifying
how it will be implemented; budgets are a key planning tool.
5. The process of gathering feedback to ensure that the plan is being
properly executed or modified as circumstances change is called:
A. Planning
B. Directing
C. Controlling
D. Budgeting only
ANSWER : C. Controlling
Explanation: Controlling compares actual results with the plan and
provides feedback so corrective action can be taken.
BUS-A 207 Practice Examination | Page 2
,6. Mobilizing people to carry out plans and run routine activities is known
as:
A. Directing and motivating
B. Controlling
C. Strategic planning
D. Performance reporting
ANSWER : A. Directing and motivating
Explanation: Directing and motivating covers day-to-day management
activities such as handling employee issues and resolving problems.
7. A performance report primarily compares:
A. This year's budget with last year's budget
B. Assets with liabilities
C. Sales with industry averages
D. Actual results with budgeted results
ANSWER : D. Actual results with budgeted results
Explanation: A performance report is a key control device because it
highlights differences between actual and planned results.
8. Which of the following is a staff position within a manufacturing
company?
A. Production manager
B. Controller
C. Plant supervisor
D. Sales representative
ANSWER : B. Controller
Explanation: Staff positions support line positions. The controller
provides accounting support but does not directly produce or sell the
product.
BUS-A 207 Practice Examination | Page 3
, 9. Which of the following is an example of a line position?
A. Manager of the assembly department
B. Corporate controller
C. Director of human resources
D. Corporate legal counsel
ANSWER : A. Manager of the assembly department
Explanation: Line positions are directly involved in achieving the basic
objectives of the organization, such as producing goods.
10. Under the IMA Statement of Ethical Professional Practice, the standard
of competence requires management accountants to:
A. Disclose all company information to the public
B. Follow the instructions of their supervisors in every situation
C. Maintain an appropriate level of professional expertise through
continuing development of knowledge and skills
D. Avoid all contact with external auditors
ANSWER : C. Maintain an appropriate level of professional expertise
through continuing development of knowledge and skills
Explanation: Competence is one of the four IMA ethical standards, along
with confidentiality, integrity, and credibility.
11. Under the IMA ethical standards, confidentiality requires that
management accountants:
A. Never share any information with anyone
B. Share information only with competitors
C. Disclose all information to family members
D. Refrain from disclosing confidential information unless authorized or
legally obligated to do so
ANSWER : D. Refrain from disclosing confidential information
unless authorized or legally obligated to do so
Explanation: Confidential information may be released only with proper
authorization or when there is a legal obligation.
BUS-A 207 Practice Examination | Page 4
| EXAM QUESTIONS AND CORRECT ANSWERS | VERIFIED
MANAGERIAL ACCOUNTING LATEST 2026/2027
BUS-A 207: Introduction to Managerial Accounting: Honors (3 cr.)
1. Which group is the primary user of managerial accounting information?
A. Creditors and lenders
B. Internal managers of the organization
C. Government regulators
D. External shareholders
ANSWER : B. Internal managers of the organization
Explanation: Managerial accounting is designed to meet the information
needs of managers inside the organization, while financial accounting
serves external parties.
2. Which of the following is a characteristic of managerial accounting rather
than financial accounting?
A. It must follow generally accepted accounting principles
B. It is reported to outside investors on a quarterly basis
C. It focuses on the organization as a whole
D. It places emphasis on decisions that affect the future
ANSWER : D. It places emphasis on decisions that affect the future
Explanation: Managerial accounting is forward-looking and supports
decision making. The other choices describe financial accounting.
BUS-A 207 Practice Examination | Page 1
,3. Managerial accounting reports prepared for internal use are:
A. Not required to follow GAAP
B. Audited each year by independent CPAs
C. Filed with the Securities and Exchange Commission
D. Required to follow IFRS
ANSWER : A. Not required to follow GAAP
Explanation: Because the reports are used internally, managers may
design them in whatever form best serves their decisions.
4. Which management function involves establishing goals and preparing
budgets?
A. Controlling
B. Directing and motivating
C. Planning
D. Auditing
ANSWER : C. Planning
Explanation: Planning means selecting a course of action and specifying
how it will be implemented; budgets are a key planning tool.
5. The process of gathering feedback to ensure that the plan is being
properly executed or modified as circumstances change is called:
A. Planning
B. Directing
C. Controlling
D. Budgeting only
ANSWER : C. Controlling
Explanation: Controlling compares actual results with the plan and
provides feedback so corrective action can be taken.
BUS-A 207 Practice Examination | Page 2
,6. Mobilizing people to carry out plans and run routine activities is known
as:
A. Directing and motivating
B. Controlling
C. Strategic planning
D. Performance reporting
ANSWER : A. Directing and motivating
Explanation: Directing and motivating covers day-to-day management
activities such as handling employee issues and resolving problems.
7. A performance report primarily compares:
A. This year's budget with last year's budget
B. Assets with liabilities
C. Sales with industry averages
D. Actual results with budgeted results
ANSWER : D. Actual results with budgeted results
Explanation: A performance report is a key control device because it
highlights differences between actual and planned results.
8. Which of the following is a staff position within a manufacturing
company?
A. Production manager
B. Controller
C. Plant supervisor
D. Sales representative
ANSWER : B. Controller
Explanation: Staff positions support line positions. The controller
provides accounting support but does not directly produce or sell the
product.
BUS-A 207 Practice Examination | Page 3
, 9. Which of the following is an example of a line position?
A. Manager of the assembly department
B. Corporate controller
C. Director of human resources
D. Corporate legal counsel
ANSWER : A. Manager of the assembly department
Explanation: Line positions are directly involved in achieving the basic
objectives of the organization, such as producing goods.
10. Under the IMA Statement of Ethical Professional Practice, the standard
of competence requires management accountants to:
A. Disclose all company information to the public
B. Follow the instructions of their supervisors in every situation
C. Maintain an appropriate level of professional expertise through
continuing development of knowledge and skills
D. Avoid all contact with external auditors
ANSWER : C. Maintain an appropriate level of professional expertise
through continuing development of knowledge and skills
Explanation: Competence is one of the four IMA ethical standards, along
with confidentiality, integrity, and credibility.
11. Under the IMA ethical standards, confidentiality requires that
management accountants:
A. Never share any information with anyone
B. Share information only with competitors
C. Disclose all information to family members
D. Refrain from disclosing confidential information unless authorized or
legally obligated to do so
ANSWER : D. Refrain from disclosing confidential information
unless authorized or legally obligated to do so
Explanation: Confidential information may be released only with proper
authorization or when there is a legal obligation.
BUS-A 207 Practice Examination | Page 4
