TEST BANK
Financial and Managerial Accounting:
Managerial Chapters, 7th Edition
(Miller-Nobles) Chapter 1-11
,Chapter M:1 Introduction to Managerial Accounting
Learning Objective M:1-1
1) 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)
2) 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 needswhile
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)
3) 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)
4) 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)
5) Financial hreporting his htypically hmuch hmore hdetailed hthan hmanagerial
haccounting. h hAnswer: h FALSE
Explanation: h Financial h reporting h is h typically h less h detailed h than h managerial h accounting
h information. h Financial h accounting h reporting h is h usually h summary h reports, h prepared
h primarily h on h the h company h as h a h whole, husually hon ha hquarterly hor hannual hbasis.
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
6) Managerial haccounting hprovides hfinancial hstatements hthat hreport hresults hof hoperations,
hfinancial h position, hand hcash hflows hboth hto hmanagers hand hto hexternal hstockholders.
Answer: h hFALSE
Explanation: hManagerial haccounting hprovides hthe hinformation hneeded hto hplan hand hcontrol
hoperations hand h therefore hserves hthe hinformation hneeds hof hinternal hparties hsuch has hmanagers
hand hstaff.
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
7) Which hof hthe hfollowing his ha hfocus hof hmanagerial haccounting?
A) to hgenerate ha hcompany's hfinancial hstatements hfor htax hreporting
B) to hprovide hinformation hto hbusiness hmanagers hto hassist hthem hin hcontrolling htheir hbusinesses
C) to hprovide hinformation hto hshareholders hto hassist hthem hwith htheir hinvestment hdecisions
D) to hensure hthat hthe hreports hproduced hfor hinternal hand hexternal hbusiness hpurposes hare hGAAP
hcompliant h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
8) Which hof hthe hfollowing hstatements his htrue hof hmanagerial haccounting?
A) The hexternal hstakeholders hof ha hcompany hare hthe hprimary husers hof hmanagerial haccounting.
B) Managerial haccounting hinformation his hused hto hhelp hmanagers hplan, hdirect hand hcontrol htheir
hoperations.
C) An hexternal haudit hby han hindependent hCPA his hrequired hfor hmanagerial haccounting hinformation.
D) Managerial haccounting hinformation hmust hcomply hwith hGenerally hAccepted hAccounting
hPrinciples. h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
, PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
9) Managerial haccounting hinformation hfor ha hcompany his hprimarily hused hby .
A) its hcustomers hto hunderstand hthe hpricing hof hthe hproduct
B) its hcreditors hto hunderstand hthe hcredibility hof hthe hbusiness
C) its hemployees hto hplan, hdirect hand hcontrol hoperations
D) its hinvestors hto hmake htheir hinvestment
hdecisions h hAnswer: h C
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
10) Which hof hthe hfollowing hstatements his htrue hof hfinancial haccounting?
A) It hprovides hinformation hto hinvestors hneeded hfor htheir hinvestment hdecisions.
B) It hprovides hfuture hfocused hinformation hneeded hfor hmanaging hand hdelegating hoperations.
C) It hfocuses hon hdetailed hreports hfor hparts hof hthe hcompany hrather hthan hthe hwhole hcompany.
D) It hfocuses hon hplanning, hdirecting hand hcontrolling hday-to-day
hoperations. h hAnswer: h A
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
11) Which hof hthe hfollowing his hthe hprimary hfocus hof hmanagerial haccounting?
A) providing hinformation hthat hmanagers hneed hto hmake hoperational hdecisions
B) providing hhistorical hdata hto hinvestors hand hcreditors
C) providing hsummarized hresults hof hoperations
D) providing hinformation hto hcomply hwith hlaws hand hregulations hof hgovernment
hbodies h hAnswer: h A
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
12) Which hof hthe hfollowing his hthe hprimary hfocus hof hfinancial haccounting?
A) providing hinformation hthat hmanagers hneed hto hmake hoperational hdecisions
B) providing hsummarized hinformation hon hoperational hresults hto hinvestors hand hcreditors
C) providing hinformation hto hmanagers hto hassist hin hplanning, hdirecting hand hcontrolling hoperations
D) providing hhighly hdetailed hinformation hon hproduct hlines, hregions, hand
hdivisions h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h h Application hof hknowledge
Financial and Managerial Accounting:
Managerial Chapters, 7th Edition
(Miller-Nobles) Chapter 1-11
,Chapter M:1 Introduction to Managerial Accounting
Learning Objective M:1-1
1) 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)
2) 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 needswhile
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)
3) 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)
4) 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)
5) Financial hreporting his htypically hmuch hmore hdetailed hthan hmanagerial
haccounting. h hAnswer: h FALSE
Explanation: h Financial h reporting h is h typically h less h detailed h than h managerial h accounting
h information. h Financial h accounting h reporting h is h usually h summary h reports, h prepared
h primarily h on h the h company h as h a h whole, husually hon ha hquarterly hor hannual hbasis.
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
6) Managerial haccounting hprovides hfinancial hstatements hthat hreport hresults hof hoperations,
hfinancial h position, hand hcash hflows hboth hto hmanagers hand hto hexternal hstockholders.
Answer: h hFALSE
Explanation: hManagerial haccounting hprovides hthe hinformation hneeded hto hplan hand hcontrol
hoperations hand h therefore hserves hthe hinformation hneeds hof hinternal hparties hsuch has hmanagers
hand hstaff.
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
7) Which hof hthe hfollowing his ha hfocus hof hmanagerial haccounting?
A) to hgenerate ha hcompany's hfinancial hstatements hfor htax hreporting
B) to hprovide hinformation hto hbusiness hmanagers hto hassist hthem hin hcontrolling htheir hbusinesses
C) to hprovide hinformation hto hshareholders hto hassist hthem hwith htheir hinvestment hdecisions
D) to hensure hthat hthe hreports hproduced hfor hinternal hand hexternal hbusiness hpurposes hare hGAAP
hcompliant h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
8) Which hof hthe hfollowing hstatements his htrue hof hmanagerial haccounting?
A) The hexternal hstakeholders hof ha hcompany hare hthe hprimary husers hof hmanagerial haccounting.
B) Managerial haccounting hinformation his hused hto hhelp hmanagers hplan, hdirect hand hcontrol htheir
hoperations.
C) An hexternal haudit hby han hindependent hCPA his hrequired hfor hmanagerial haccounting hinformation.
D) Managerial haccounting hinformation hmust hcomply hwith hGenerally hAccepted hAccounting
hPrinciples. h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
, PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
9) Managerial haccounting hinformation hfor ha hcompany his hprimarily hused hby .
A) its hcustomers hto hunderstand hthe hpricing hof hthe hproduct
B) its hcreditors hto hunderstand hthe hcredibility hof hthe hbusiness
C) its hemployees hto hplan, hdirect hand hcontrol hoperations
D) its hinvestors hto hmake htheir hinvestment
hdecisions h hAnswer: h C
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
10) Which hof hthe hfollowing hstatements his htrue hof hfinancial haccounting?
A) It hprovides hinformation hto hinvestors hneeded hfor htheir hinvestment hdecisions.
B) It hprovides hfuture hfocused hinformation hneeded hfor hmanaging hand hdelegating hoperations.
C) It hfocuses hon hdetailed hreports hfor hparts hof hthe hcompany hrather hthan hthe hwhole hcompany.
D) It hfocuses hon hplanning, hdirecting hand hcontrolling hday-to-day
hoperations. h hAnswer: h A
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
11) Which hof hthe hfollowing his hthe hprimary hfocus hof hmanagerial haccounting?
A) providing hinformation hthat hmanagers hneed hto hmake hoperational hdecisions
B) providing hhistorical hdata hto hinvestors hand hcreditors
C) providing hsummarized hresults hof hoperations
D) providing hinformation hto hcomply hwith hlaws hand hregulations hof hgovernment
hbodies h hAnswer: h A
Diff: h1
LO: h h M:1-1
AACSB: h Application hof hknowledge
h AICPA hFunctional: h Reporting
PE hQuestion hType: h h Concept
H2: h h Why hIs hManagerial hAccounting hImportant? h(H1)
12) Which hof hthe hfollowing his hthe hprimary hfocus hof hfinancial haccounting?
A) providing hinformation hthat hmanagers hneed hto hmake hoperational hdecisions
B) providing hsummarized hinformation hon hoperational hresults hto hinvestors hand hcreditors
C) providing hinformation hto hmanagers hto hassist hin hplanning, hdirecting hand hcontrolling hoperations
D) providing hhighly hdetailed hinformation hon hproduct hlines, hregions, hand
hdivisions h hAnswer: h B
Diff: h1
LO: h h M:1-1
AACSB: h h Application hof hknowledge
