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 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)
6) 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)
7) 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)
8) 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)
9) Managerial saccounting sinformation sfor sa scompany sis sprimarily sused sby .
A) its scustomers sto sunderstand sthe spricing sof sthe sproduct
B) its screditors sto sunderstand sthe scredibility sof sthe sbusiness
C) its semployees sto splan, sdirect sand scontrol soperations
D) its sinvestors sto smake stheir sinvestment
sdecisions s sAnswer: s C
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
10) Which sof sthe sfollowing sstatements sis strue sof sfinancial saccounting?
A) It sprovides sinformation sto sinvestors sneeded sfor stheir sinvestment sdecisions.
B) It sprovides sfuture sfocused sinformation sneeded sfor smanaging sand sdelegating soperations.
C) It sfocuses son sdetailed sreports sfor sparts sof sthe scompany srather sthan sthe swhole scompany.
D) It sfocuses son splanning, sdirecting sand scontrolling sday-to-day
soperations. s sAnswer: s A
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
11) Which sof sthe sfollowing sis sthe sprimary sfocus sof smanagerial saccounting?
A) providing sinformation sthat smanagers sneed sto smake soperational sdecisions
B) providing shistorical sdata sto sinvestors sand screditors
C) providing ssummarized sresults sof soperations
D) providing sinformation sto scomply swith slaws sand sregulations sof sgovernment
sbodies s sAnswer: s A
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
12) Which sof sthe sfollowing sis sthe sprimary sfocus sof sfinancial saccounting?
A) providing sinformation sthat smanagers sneed sto smake soperational sdecisions
B) providing ssummarized sinformation son soperational sresults sto sinvestors sand screditors
C) providing sinformation sto smanagers sto sassist sin splanning, sdirecting sand scontrolling soperations
D) providing shighly sdetailed sinformation son sproduct slines, sregions, sand
sdivisions s sAnswer: s B
Diff: s1
LO: s s M:1-1
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 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)
6) 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)
7) 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)
8) 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)
9) Managerial saccounting sinformation sfor sa scompany sis sprimarily sused sby .
A) its scustomers sto sunderstand sthe spricing sof sthe sproduct
B) its screditors sto sunderstand sthe scredibility sof sthe sbusiness
C) its semployees sto splan, sdirect sand scontrol soperations
D) its sinvestors sto smake stheir sinvestment
sdecisions s sAnswer: s C
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
10) Which sof sthe sfollowing sstatements sis strue sof sfinancial saccounting?
A) It sprovides sinformation sto sinvestors sneeded sfor stheir sinvestment sdecisions.
B) It sprovides sfuture sfocused sinformation sneeded sfor smanaging sand sdelegating soperations.
C) It sfocuses son sdetailed sreports sfor sparts sof sthe scompany srather sthan sthe swhole scompany.
D) It sfocuses son splanning, sdirecting sand scontrolling sday-to-day
soperations. s sAnswer: s A
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
11) Which sof sthe sfollowing sis sthe sprimary sfocus sof smanagerial saccounting?
A) providing sinformation sthat smanagers sneed sto smake soperational sdecisions
B) providing shistorical sdata sto sinvestors sand screditors
C) providing ssummarized sresults sof soperations
D) providing sinformation sto scomply swith slaws sand sregulations sof sgovernment
sbodies s sAnswer: s A
Diff: s1
LO: s s M:1-1
AACSB: s Application sof
sknowledge s AICPA
sFunctional: s Reporting
PE sQuestion sType: s s Concept
H2: s sWhy sIs sManagerial sAccounting sImportant? s(H1)
12) Which sof sthe sfollowing sis sthe sprimary sfocus sof sfinancial saccounting?
A) providing sinformation sthat smanagers sneed sto smake soperational sdecisions
B) providing ssummarized sinformation son soperational sresults sto sinvestors sand screditors
C) providing sinformation sto smanagers sto sassist sin splanning, sdirecting sand scontrolling soperations
D) providing shighly sdetailed sinformation son sproduct slines, sregions, sand
sdivisions s sAnswer: s B
Diff: s1
LO: s s M:1-1
