C213 ACCT 5000
Accounting For Decision Makers
Comprehensive FA Review (Qns & Ans)
2025
1. Which of the following is the primary purpose of managerial
accounting?
- A) Preparing financial statements for external stakeholders
- B) Assisting managers in making informed business decisions
- C) Ensuring compliance with tax regulations
- D) Conducting annual audits
- ANS: B) Assisting managers in making informed business
decisions
©/2025
, - Rationale: Managerial accounting focuses on providing
information to managers within an organization to help them
make informed business decisions.
2. What is the key difference between fixed costs and variable
costs?
- A) Fixed costs change with production levels, while variable
costs remain constant
- B) Variable costs change with production levels, while fixed
costs remain constant
- C) Both fixed and variable costs change with production levels
- D) Neither fixed nor variable costs change with production
levels
- ANS: B) Variable costs change with production levels, while
fixed costs remain constant
- Rationale: Fixed costs remain constant regardless of
production levels, whereas variable costs change directly with
production volume.
Fill-in-the-Blank Questions
3. __________ refers to the cost of choosing one investment
over another and is a key consideration in decision-making.
- ANS: Opportunity cost
©/2025
, - Rationale: Opportunity cost represents the potential benefits
that are forgone by choosing one investment over another, making
it a critical factor in decision-making.
4. The __________ margin is a measure of profitability that
calculates the difference between sales revenue and variable costs.
- ANS: contribution
- Rationale: The contribution margin measures profitability
by calculating the difference between sales revenue and variable
costs, indicating how much revenue is available to cover fixed
costs and generate profit.
True/False Questions
5. True or False: The break-even point is the level of sales at
which total revenue equals total costs.
- ANS: True
- Rationale: The break-even point represents the level of sales
at which total revenue equals total costs, resulting in neither profit
nor loss.
6. True or False: Managerial accounting reports are primarily
intended for external stakeholders such as investors and
regulators.
©/2025
, - ANS: False
- Rationale: Managerial accounting reports are intended for
internal stakeholders, such as managers, to support decision-
making within the organization.
Multiple Response Questions
7. Which of the following are components of a balanced
scorecard? (Select all that apply)
- A) Financial perspective
- B) Customer perspective
- C) Internal process perspective
- D) Innovation and learning perspective
- ANS: A) Financial perspective, B) Customer perspective, C)
Internal process perspective, D) Innovation and learning
perspective
- Rationale: A balanced scorecard includes the financial
perspective, customer perspective, internal process perspective,
and innovation and learning perspective to provide a
comprehensive view of organizational performance.
8. Which of the following are considered indirect costs in
healthcare management? (Select all that apply)
- A) Utilities
©/2025
Accounting For Decision Makers
Comprehensive FA Review (Qns & Ans)
2025
1. Which of the following is the primary purpose of managerial
accounting?
- A) Preparing financial statements for external stakeholders
- B) Assisting managers in making informed business decisions
- C) Ensuring compliance with tax regulations
- D) Conducting annual audits
- ANS: B) Assisting managers in making informed business
decisions
©/2025
, - Rationale: Managerial accounting focuses on providing
information to managers within an organization to help them
make informed business decisions.
2. What is the key difference between fixed costs and variable
costs?
- A) Fixed costs change with production levels, while variable
costs remain constant
- B) Variable costs change with production levels, while fixed
costs remain constant
- C) Both fixed and variable costs change with production levels
- D) Neither fixed nor variable costs change with production
levels
- ANS: B) Variable costs change with production levels, while
fixed costs remain constant
- Rationale: Fixed costs remain constant regardless of
production levels, whereas variable costs change directly with
production volume.
Fill-in-the-Blank Questions
3. __________ refers to the cost of choosing one investment
over another and is a key consideration in decision-making.
- ANS: Opportunity cost
©/2025
, - Rationale: Opportunity cost represents the potential benefits
that are forgone by choosing one investment over another, making
it a critical factor in decision-making.
4. The __________ margin is a measure of profitability that
calculates the difference between sales revenue and variable costs.
- ANS: contribution
- Rationale: The contribution margin measures profitability
by calculating the difference between sales revenue and variable
costs, indicating how much revenue is available to cover fixed
costs and generate profit.
True/False Questions
5. True or False: The break-even point is the level of sales at
which total revenue equals total costs.
- ANS: True
- Rationale: The break-even point represents the level of sales
at which total revenue equals total costs, resulting in neither profit
nor loss.
6. True or False: Managerial accounting reports are primarily
intended for external stakeholders such as investors and
regulators.
©/2025
, - ANS: False
- Rationale: Managerial accounting reports are intended for
internal stakeholders, such as managers, to support decision-
making within the organization.
Multiple Response Questions
7. Which of the following are components of a balanced
scorecard? (Select all that apply)
- A) Financial perspective
- B) Customer perspective
- C) Internal process perspective
- D) Innovation and learning perspective
- ANS: A) Financial perspective, B) Customer perspective, C)
Internal process perspective, D) Innovation and learning
perspective
- Rationale: A balanced scorecard includes the financial
perspective, customer perspective, internal process perspective,
and innovation and learning perspective to provide a
comprehensive view of organizational performance.
8. Which of the following are considered indirect costs in
healthcare management? (Select all that apply)
- A) Utilities
©/2025
