Managerial Accounting (17th Edition) – Garrison, Noreen & Brewer – McGraw-Hill – Comprehensive Theoretical Practice Questions and Exam Review Material

Managerial Accounting
17 th Editi on
Garrison | Noreen | Brewer


THEORIES
PROLOGUE - Managerial Accounting: An
Overview
1. Which of the following best describes managerial accounting?
A. Reporting financial information to investors and regulators
B. Providing information to managers for planning and decision-making
C. Preparing tax returns for government agencies
D. Auditing financial statements

2. Financial accounting primarily focuses on:
A. Future projections
B. Internal management decisions
C. Past financial activities
D. Operational efficiency

3. Which characteristic is emphasized more in managerial accounting than in financial
accounting?
A. Precision
B. Timeliness
C. Compliance with GAAP
D. Objectivity

4. Which of the following users primarily rely on financial accounting information?
A. Production managers
B. Marketing managers
C. Creditors and investors
D. Department supervisors

5. Which of the following statements about managerial accounting reports is correct?
A. They must follow IFRS or GAAP
B. They are prepared annually only
C. They are designed for internal use
D. They focus mainly on historical data

6. Planning in managerial accounting involves:

Reference: Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2020). Managerial accounting (17th
ed.). Mcgraw-Hill Education.

, A. Comparing actual results with expected results
B. Establishing goals and specifying how to achieve them
C. Recording transactions
D. Auditing financial statements

7. A budget is best described as:
A. A list of past financial transactions
B. A detailed plan expressed in quantitative terms
C. A financial statement required by regulators
D. A summary of past performance

8. A marketing manager estimating next year's advertising expenses is engaged in:
A. Controlling
B. Planning
C. Auditing
D. Compliance reporting

9. When a manager determines how many employees to hire next year, this activity is part of:
A. Budget analysis
B. Planning
C. Controlling
D. Performance evaluation

10. Which of the following is most likely included in a planning activity?
A. Investigating why sales decreased last month
B. Determining next year’s hiring targets
C. Comparing budgeted costs with actual costs
D. Evaluating employee performance

11. The control process primarily involves:
A. Setting long-term goals
B. Monitoring performance and making corrections
C. Recording financial transactions
D. Preparing financial statements

12. A performance report compares:
A. Budgeted results with actual results
B. Current results with competitor results
C. Cash inflows with cash outflows
D. Revenue with profit margins

13. If a company compares actual production costs with budgeted costs, it is performing:
A. Planning
B. Decision making

Reference: Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2020). Managerial accounting (17th
ed.). Mcgraw-Hill Education.

, C. Controlling
D. Forecasting

14. A department manager investigates why production exceeded the budget. This is an
example of:
A. Planning
B. Controlling
C. Strategic management
D. Compliance auditing

15. Which of the following is a control activity?
A. Setting annual sales targets
B. Reviewing performance reports
C. Developing a marketing strategy
D. Designing a new product

16. Decision making in managerial accounting involves:
A. Recording financial transactions
B. Selecting among alternative courses of action
C. Preparing annual financial statements
D. Ensuring regulatory compliance

17. A company deciding whether to introduce a new product is engaged in:
A. Planning
B. Controlling
C. Decision making
D. Financial reporting

18. Determining which customer group to target with marketing efforts is an example of:
A. Cost classification
B. Decision making
C. Performance evaluation
D. Budget control

19. A manager deciding whether to outsource production is performing:
A. Planning
B. Decision making
C. Auditing
D. Cost allocation

20. The question “What products should we discontinue?” relates to:
A. Planning
B. Decision making
C. Controlling

Reference: Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2020). Managerial accounting (17th
ed.). Mcgraw-Hill Education.

, D. Forecasting

21. Big Data refers to:
A. Only financial information
B. Large collections of structured and unstructured data
C. Government economic reports
D. Only customer surveys

22. The volume aspect of Big Data refers to:
A. Data reliability
B. The amount of data generated
C. Data speed
D. Data accuracy

23. Data analytics used to answer “What happened?” is called:
A. Predictive analytics
B. Diagnostic analytics
C. Descriptive analytics
D. Prescriptive analytics

24. If managers analyze data to determine why sales declined, they are using:
A. Diagnostic analytics
B. Predictive analytics
C. Prescriptive analytics
D. Descriptive analytics

25. Predicting future sales using regression analysis is an example of:
A. Diagnostic analytics
B. Predictive analytics
C. Descriptive analytics
D. Strategic planning

26. Ethical behavior in business helps:
A. Increase financial reporting errors
B. Improve trust and economic efficiency
C. Reduce organizational transparency
D. Eliminate decision making

27. According to the IMA ethical standards, management accountants must maintain:
A. Competence
B. Confidentiality
C. Integrity
D. All of the above


Reference: Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2020). Managerial accounting (17th
ed.). Mcgraw-Hill Education.