ACG2071 Exam 1 Review Questions With
Complete Answers
What is the primary goal of managerial accounting? - ANSWER is to provide information
for internal decision making, with an emphasis on planning and control purposes
5 basic phases of managerial accounting: - ANSWER 1) Planning: used in developing the
company's objectives (goals) and translating these objectives into a course of action
2) Directing: the process by which managers run day-to-day operations
3) Controlling: Monitoring operating results and comparing actual results with the
expected results
4) Improving: is the philosophy of continually improving employees, business process,
and products
5) Decision Making: Inherent in each of the preceding management processes
Financial Accounting - ANSWER Nature of Information: Objective
Guidelines for Preparation: according to GAAP
Timeliness of Reporting: Fixed Intervals
Focus of Reporting: Company as a whole
Typical Users: External (stockholders, creditors, government agencies, the general public)
Managerial Accounting - ANSWER Nature of Information: Objective & Subjective
, Guidelines for Preparation: according to Management needs
Timeliness of Reporting: Fixed Intervals & on an as-needed basis
Focus of Reporting: Company as a whole or as a segment
Typical Users: Internal (management)
Factory Overhead: - ANSWER Are costs other than direct materials and labor that are
incurred in the manufacturing process (Utilities, repair and maintenance on equipment,
insurance, depreciation, salaries of production supervisors, glue and other consumables
that make up an insignificant portion of the total product cost)
Direct Labor: - ANSWER The cost of employee wages that is an integral part of the
finished product
Direct Materials: - ANSWER The cost of any material that is an integral part of the
finished product
Direct Costs: - ANSWER Are identified with and can be traced to a cost object
- Direct Labor Cost
- Direct Material Cost
Direct Labor Cost: - ANSWER Must be both:
- an integral part of the finished product
Complete Answers
What is the primary goal of managerial accounting? - ANSWER is to provide information
for internal decision making, with an emphasis on planning and control purposes
5 basic phases of managerial accounting: - ANSWER 1) Planning: used in developing the
company's objectives (goals) and translating these objectives into a course of action
2) Directing: the process by which managers run day-to-day operations
3) Controlling: Monitoring operating results and comparing actual results with the
expected results
4) Improving: is the philosophy of continually improving employees, business process,
and products
5) Decision Making: Inherent in each of the preceding management processes
Financial Accounting - ANSWER Nature of Information: Objective
Guidelines for Preparation: according to GAAP
Timeliness of Reporting: Fixed Intervals
Focus of Reporting: Company as a whole
Typical Users: External (stockholders, creditors, government agencies, the general public)
Managerial Accounting - ANSWER Nature of Information: Objective & Subjective
, Guidelines for Preparation: according to Management needs
Timeliness of Reporting: Fixed Intervals & on an as-needed basis
Focus of Reporting: Company as a whole or as a segment
Typical Users: Internal (management)
Factory Overhead: - ANSWER Are costs other than direct materials and labor that are
incurred in the manufacturing process (Utilities, repair and maintenance on equipment,
insurance, depreciation, salaries of production supervisors, glue and other consumables
that make up an insignificant portion of the total product cost)
Direct Labor: - ANSWER The cost of employee wages that is an integral part of the
finished product
Direct Materials: - ANSWER The cost of any material that is an integral part of the
finished product
Direct Costs: - ANSWER Are identified with and can be traced to a cost object
- Direct Labor Cost
- Direct Material Cost
Direct Labor Cost: - ANSWER Must be both:
- an integral part of the finished product
