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

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Financial and Managerial Accounting:
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Managerial Chapters, 7th Edition
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(Miller-Nobles) Chapter 1-11
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,Chapter M:1 ju Introduction to Managerial Accounting ju ju ju




Learning Objective M:1-1 ju ju




1) Managerial accounting focuses on providing information for internal planning and
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control. Answer: TRUE
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AACSB: Application of ju ju



knowledge AICPA Functional:
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Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
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provides
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Answer: FALSE ju ju



Explanation: The reverse is true. Financial accounting serves external stakeholder information
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needswhile managerial accounting serves the needs of managers and internal staff.
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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3) Financial statements prepared for investors and creditors often include forward-looking
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information because they make decisions based on a company's future prospects.
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Answer: FALSE ju ju



Explanation: Financial statements provide mostly historical information; relevant and
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faithfully representative information and focused on the past.
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knowledge AICPA Functional:
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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4) Managerial accounting reporting by a public firm is required to follow the rules of
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GAAP. Answer: FALSE
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Explanation: Managerial accounting information is not guided by GAAP but rather by the concept
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of usefulness to management for decision making purposes.
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PE Question Type: Concept
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,H2: Why Is Managerial Accounting Important? (H1)
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5) Financial reporting is typically much more detailed than managerial
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accounting. Answer: FALSE
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Explanation: Financial reporting is typically less detailed than managerial accounting
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information.
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primarily on the company as a whole, usually on a quarterly or annual basis.
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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6) Managerial accounting provides financial statements that report results of operations,
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financial position, and cash flows both to managers and to external stockholders.
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Answer: FALSE ju ju



Explanation: Managerial accounting provides the information needed to plan and control operations
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and therefore serves the information needs of internal parties such as managers and staff.
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AACSB: Application of ju ju



knowledge AICPA Functional:
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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7) Which of the following is a focus of managerial accounting?
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A) to generate a company's financial statements for tax reporting
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B) to provide information to business managers to assist them in controlling their businesses
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C) to provide information to shareholders to assist them with their 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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AACSB: Application of ju ju



knowledge AICPA Functional:
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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8) Which of the following statements is true of managerial accounting?
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A) The external stakeholders of a company are the primary users of managerial accounting.
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B) Managerial accounting information is used to help managers plan, direct and control ju ju ju ju ju ju ju ju ju ju ju their
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operations.
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C) An external audit by an independent CPA is required for managerial accounting information.
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D) Managerial accounting information must comply with Generally Accepted Accounting ju ju ju ju ju ju ju ju



Principles. Answer: B
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