TEST BANK Financial and Managerial Accounting: Managerial Chapters, 7 th Edition (Miller-Nobles) Chapter 1-11

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,Chapter M:1 ss Introduction to Managerial Accounting ss ss ss




LearningObjectiveM:1-1

1)Managerialaccountingfocuses onprovidinginformationforinternal planning and
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control. Answer: TRUE
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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2)Financialaccountingpreparesreports forinternalpurposes,whereasmanagerial accounting ju ss



provides informationtoexternalstakeholders.
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Answer: FALSE ju s s ju



Explanation: The reverse is true. Financial accounting serves external stakeholder information
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needswhile managerial accounting servesthe needs of managers and internal staff.
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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3) Financialstatements prepared for investors and creditors often includeforward-looking
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information because they make decisions based on a company's future prospects.
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Answer: FALSE
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Explanation: Financial statements provide mostly historical information; relevantand
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faithfully representative information and focused on the past.
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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4)Managerial accounting reporting by apublic firmisrequired to follow the rules of
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GAAP. Answer: FALSE
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Explanation:Managerial accounting informationisnot guidedby GAAP butrather by theconcept of
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usefulnessto management for decision making purposes. ss ss ss s ss



Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
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PE Question Type: Concept
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,H2: s s s s Why Is Managerial Accounting Important? (H1)
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5)Financialreportingistypicallymuchmoredetailed thanmanagerial ss



accounting. Answer: FALSE
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Explanation: Financial reporting is typically less detailed than managerial accounting
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information.
ss Financial accounting reporting is usually summary reports, s s ss ss ss ss ss ss



prepared primarily on the company as a
ss whole,usuallyonaquarterlyorannual basis.
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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6)Managerial accountingprovidesfinancialstatements thatreportresultsofoperations,
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financial position, andcash flowsbothto managers and to external stockholders.
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Answer: FALSE
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Explanation: Managerial accountingprovidestheinformation neededtoplanand controloperations
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and thereforeserves theinformation needs of internalparties such asmanagers andstaff.
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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7) Whichofthefollowingis a focus of managerial accounting?
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A) to generate acompany's financial statements for taxreporting
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B) to provideinformation to business managers to assist themincontrolling their businesses
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C) to provide information to shareholders to assistthem withtheir investment decisions
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D) to ensure that the reports produced for internal and external business purposes are GAAP
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compliant Answer: B
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Diff: 1 ss



LO: M:1-1 s s



AACSB: Applicationof ss s



knowledge AICPAFunctional:
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Reporting
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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8) Whichofthe f ollowing s tatementsistrue ofmanagerial accounting? s s ss ss



A) The external stakeholders ofa company are the primary users of managerial accounting.
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B) Managerial accounting information is used to help managers plan, direct and ss ss ss ss ss ss ss ss ss ss ss control
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C) AnexternalauditbyanindependentCPA is required formanagerial accountinginformation.
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D) Managerialaccountinginformation mustcomplywithGenerallyAcceptedAccounting ju s s



Principles. Answer: B
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Diff: 1 ss



LO: M:1-1 s s

, AACSB: Applicationof
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knowledge AICPAFunctional:
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Reporting
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