Managerial Accounting Test 1 questions with correct answers

Balance Sheets Correct Answer-1. snapshot of resources (assets) and claims (liability+equity) 2. based on accounting equation Statement of Earnings (Income Statement) Correct Answer-- operating performance over period of time - Revenues and expenses Statement of Cash Flows Correct Answer-- flows of cash over time - Shows operating, investing, and financing activities Financial vs. Managerial Accounting Correct Answer-- Financial accy: users are external persons, has a historical perspective, emphasis on verifiability, emphasis on precision, focus on whole organization, follow GAAP formats, mandatory for reports - Managerial accy: users are managers, future emphasis, emphasis on relevance for planning and control, emphasis on timeliness, focus on segments of organization, don't need to follow GAAP, reports not mandatory Managerial Accounting Correct Answer-also called management accounting, is a field of accounting that provides economic and financial info for managers and other internal users Direct Materials Correct Answer-raw materials that become an integral part of the product and that can be traced directly to it (physically and conveniently associate with the product