MANAGERIAL ACCOUNTING FOR DECISION
MAKERS HANLON ESSENTIAL STUDY
QUESTIONS AND ANSWERS
◉ The company's financial statements fairly reflect its financial
position.
Answer: Which assurance does an external audit report provide for
its readers?
◉ Reliable.
Answer: Information that can be verified
◉ Relevant.
Answer: Information having to do with the matter at hand
◉ Material.
Answer: Information that is important enough to make a difference
◉ Conservatism.
Answer: Information related to recognizing losses as they occur
◉ Continual decrease in sales.
,Answer: What is consistent with a continual decline in gross profit if
the firm's cost of goods sold remains the same?
◉ Notes payable expected to be paid in 18 months.
Answer: Which form of debt should be reported in the long-term
liability category?
◉ Operating expenses &
Ordinary gains and losses.
Answer: Which values affect the measurement of net income?
◉ Gross profit &
Income from operations.
Answer: Which items' subtotals are included in a multi-step income
statement?
◉ Cash from investing activities.
Answer: What is a common category in a statement of cash flows?
◉ Cash from financing activities.
Answer: Which cash flow category would include "cash received
from investors"?
,◉ Cash payments for purchase of plant assets.
Answer: Which item is an investing activity?
◉ Increase in cash from investing activities.
Answer: What impact does the sale of equipment have on the
statement of cash flows?
◉ The indirect method is more popular among large U.S. companies.
Answer: What is known about the direct and indirect methods of
preparing statements of cash flow?
◉ The inventory department counts and inspects items as received
and forwards the receiving record to accounts payable..
Answer: Which internal control is intended to ensure that a
company does not mistakenly pay a supplier for an invoice that
includes more items than were actually received?
◉ Pressure to meet internal sales goals &
Preparing to qualify for a bank loan.
Answer: What are common reasons for managers to manipulate
reported earnings?
◉ Firms must not provide certain non-audit services to audit clients,
such as management functions or legal services. &
, Firms must report to and be retained by the audit committee rather
than the CFO or other company management..
Answer: Which requirements must accounting firms that audit
public companies meet under the Sarbanes-Oxley Act?
◉ They search for and investigate fraud.
&
They review financial records and internal controls..
Answer: Which actions do internal auditors perform to assist in
maintaining the integrity of financial statements?
◉ They ensure that financial statement users are provided with
reliable information to use in decision making.
Answer: What is a significant role of the U.S. Securities and Exchange
Commission (SEC) in financial reporting?
◉ A better insight for management so a business can perform more
effectively
&
A competitive edge to a business by providing its managers with the
detailed data needed to make decisions.
Answer: What does management accounting provide?
MAKERS HANLON ESSENTIAL STUDY
QUESTIONS AND ANSWERS
◉ The company's financial statements fairly reflect its financial
position.
Answer: Which assurance does an external audit report provide for
its readers?
◉ Reliable.
Answer: Information that can be verified
◉ Relevant.
Answer: Information having to do with the matter at hand
◉ Material.
Answer: Information that is important enough to make a difference
◉ Conservatism.
Answer: Information related to recognizing losses as they occur
◉ Continual decrease in sales.
,Answer: What is consistent with a continual decline in gross profit if
the firm's cost of goods sold remains the same?
◉ Notes payable expected to be paid in 18 months.
Answer: Which form of debt should be reported in the long-term
liability category?
◉ Operating expenses &
Ordinary gains and losses.
Answer: Which values affect the measurement of net income?
◉ Gross profit &
Income from operations.
Answer: Which items' subtotals are included in a multi-step income
statement?
◉ Cash from investing activities.
Answer: What is a common category in a statement of cash flows?
◉ Cash from financing activities.
Answer: Which cash flow category would include "cash received
from investors"?
,◉ Cash payments for purchase of plant assets.
Answer: Which item is an investing activity?
◉ Increase in cash from investing activities.
Answer: What impact does the sale of equipment have on the
statement of cash flows?
◉ The indirect method is more popular among large U.S. companies.
Answer: What is known about the direct and indirect methods of
preparing statements of cash flow?
◉ The inventory department counts and inspects items as received
and forwards the receiving record to accounts payable..
Answer: Which internal control is intended to ensure that a
company does not mistakenly pay a supplier for an invoice that
includes more items than were actually received?
◉ Pressure to meet internal sales goals &
Preparing to qualify for a bank loan.
Answer: What are common reasons for managers to manipulate
reported earnings?
◉ Firms must not provide certain non-audit services to audit clients,
such as management functions or legal services. &
, Firms must report to and be retained by the audit committee rather
than the CFO or other company management..
Answer: Which requirements must accounting firms that audit
public companies meet under the Sarbanes-Oxley Act?
◉ They search for and investigate fraud.
&
They review financial records and internal controls..
Answer: Which actions do internal auditors perform to assist in
maintaining the integrity of financial statements?
◉ They ensure that financial statement users are provided with
reliable information to use in decision making.
Answer: What is a significant role of the U.S. Securities and Exchange
Commission (SEC) in financial reporting?
◉ A better insight for management so a business can perform more
effectively
&
A competitive edge to a business by providing its managers with the
detailed data needed to make decisions.
Answer: What does management accounting provide?
