TEST BANK
b
Financial and Managerial Accounting:
b b b
Managerial Chapters, 7th Edition
b b b
(Miller-Nobles) Chapter 1-11
b b
,Chapter M:1 b Introduction to Managerial Accounting b b b
Learning Objective M:1-1 b b
1) Managerial accounting focuses on providing information for internal planning and control.
b b b b b b b b b b
Answer: TRUE
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides
b b b b b b b b b b
information to external stakeholders.
b b b b
Answer: FALSE b
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
b b b b b b b b b b b b
managerial accounting serves the needs of managers and internal staff.
b b b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
3) Financial statements prepared for investors and creditors often include forward-looking information
b b b b b b b b b b
because they make decisions based on a company's future prospects.
b b b b b b b b b b
Answer: FALSE b
Explanation: Financial statements provide mostly historical information; relevant and faithfullyrepresentative
b b b b b b b b b b
information and focused on the past.
b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.
b b b b b b b b b b b b b b
Answer: FALSE
b b
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
b b b b b b b b b b b b b b
usefulness to management for decision making purposes.
b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
,H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
5) Financial reporting is typically much more detailed than managerial accounting.
b b b b b b b b b
Answer: FALSE
b b
Explanation: Financial reporting is typically less detailed than managerial accounting information.
b b b b b b b b b b
Financial accounting reporting is usually summary reports, prepared primarily on the company as a
b b b b b b b b b b b b b b
whole, usually on a quarterly or annual basis.
b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
6) Managerial accounting provides financial statements that report results of operations, financial
b b b b b b b b b b
position, and cash flows both to managers and to external stockholders.
b b b b b b b b b b b
Answer: FALSE b
Explanation: Managerial accounting provides the information needed to plan and control operations and
b b b b b b b b b b b b
therefore serves the information needs of internal parties such as managers and staff.
b b b b b b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
7) Which of the following is a focus of managerial accounting?
b b b b b b b b b
A) to generate a company's financial statements for tax reporting
b b b b b b b b
B) to provide information to business managers to assist them in controlling their businesses
b b b b b b b b b b b b
C) to provide information to shareholders to assist them with their investment decisions
b b b b b b b b b b b
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant
b b b b b b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
8) Which of the following statements is true of managerial accounting?
b b b b b b b b b
A) The external stakeholders of a company are the primary users of managerial accounting.
b b b b b b b b b b b b
B) Managerial accounting information is used to help managers plan, direct and control their operations.
b b b b b b b b b b b b b
C) An external audit by an independent CPA is required for managerial accounting information.
b b b b b b b b b b b b
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
, PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
9) Managerial accounting information for a company is primarily used by b b b b b b b b b .
A) its customers to understand the pricing of the product
b b b b b b b b
B) its creditors to understand the credibility of the business
b b b b b b b b
C) its employees to plan, direct and control operations
b b b b b b b
D) its investors to make their investment decisions
b b b b b b
Answer: C
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
10) Which of the following statements is true of financial accounting?
b b b b b b b b b
A) It provides information to investors needed for their investment decisions.
b b b b b b b b b
B) It provides future focused information needed for managing and delegating operations.
b b b b b b b b b b
C) It focuses on detailed reports for parts of the company rather than the whole company.
b b b b b b b b b b b b b b
D) It focuses on planning, directing and controlling day-to-day operations.
b b b b b b b b
Answer: A
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
11) Which of the following is the primary focus of managerial accounting?
b b b b b b b b b b
A) providing information that managers need to make operational decisions
b b b b b b b b
B) providing historical data to investors and creditors
b b b b b b
C) providing summarized results of operations b b b b
D) providing information to comply with laws and regulations of government bodies
b b b b b b b b b b
Answer: A
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
12) Which of the following is the primary focus of financial accounting?
b b b b b b b b b b
A) providing information that managers need to make operational decisions
b b b b b b b b
B) providing summarized information on operational results to investors and creditors
b b b b b b b b b
C) providing information to managers to assist in planning, directing and controlling operations
b b b b b b b b b b b
D) providing highly detailed information on product lines, regions, and divisions
b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge b b b
b
Financial and Managerial Accounting:
b b b
Managerial Chapters, 7th Edition
b b b
(Miller-Nobles) Chapter 1-11
b b
,Chapter M:1 b Introduction to Managerial Accounting b b b
Learning Objective M:1-1 b b
1) Managerial accounting focuses on providing information for internal planning and control.
b b b b b b b b b b
Answer: TRUE
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides
b b b b b b b b b b
information to external stakeholders.
b b b b
Answer: FALSE b
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
b b b b b b b b b b b b
managerial accounting serves the needs of managers and internal staff.
b b b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
3) Financial statements prepared for investors and creditors often include forward-looking information
b b b b b b b b b b
because they make decisions based on a company's future prospects.
b b b b b b b b b b
Answer: FALSE b
Explanation: Financial statements provide mostly historical information; relevant and faithfullyrepresentative
b b b b b b b b b b
information and focused on the past.
b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.
b b b b b b b b b b b b b b
Answer: FALSE
b b
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
b b b b b b b b b b b b b b
usefulness to management for decision making purposes.
b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
,H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
5) Financial reporting is typically much more detailed than managerial accounting.
b b b b b b b b b
Answer: FALSE
b b
Explanation: Financial reporting is typically less detailed than managerial accounting information.
b b b b b b b b b b
Financial accounting reporting is usually summary reports, prepared primarily on the company as a
b b b b b b b b b b b b b b
whole, usually on a quarterly or annual basis.
b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
6) Managerial accounting provides financial statements that report results of operations, financial
b b b b b b b b b b
position, and cash flows both to managers and to external stockholders.
b b b b b b b b b b b
Answer: FALSE b
Explanation: Managerial accounting provides the information needed to plan and control operations and
b b b b b b b b b b b b
therefore serves the information needs of internal parties such as managers and staff.
b b b b b b b b b b b b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
7) Which of the following is a focus of managerial accounting?
b b b b b b b b b
A) to generate a company's financial statements for tax reporting
b b b b b b b b
B) to provide information to business managers to assist them in controlling their businesses
b b b b b b b b b b b b
C) to provide information to shareholders to assist them with their investment decisions
b b b b b b b b b b b
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant
b b b b b b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
8) Which of the following statements is true of managerial accounting?
b b b b b b b b b
A) The external stakeholders of a company are the primary users of managerial accounting.
b b b b b b b b b b b b
B) Managerial accounting information is used to help managers plan, direct and control their operations.
b b b b b b b b b b b b b
C) An external audit by an independent CPA is required for managerial accounting information.
b b b b b b b b b b b b
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
, PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
9) Managerial accounting information for a company is primarily used by b b b b b b b b b .
A) its customers to understand the pricing of the product
b b b b b b b b
B) its creditors to understand the credibility of the business
b b b b b b b b
C) its employees to plan, direct and control operations
b b b b b b b
D) its investors to make their investment decisions
b b b b b b
Answer: C
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
10) Which of the following statements is true of financial accounting?
b b b b b b b b b
A) It provides information to investors needed for their investment decisions.
b b b b b b b b b
B) It provides future focused information needed for managing and delegating operations.
b b b b b b b b b b
C) It focuses on detailed reports for parts of the company rather than the whole company.
b b b b b b b b b b b b b b
D) It focuses on planning, directing and controlling day-to-day operations.
b b b b b b b b
Answer: A
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
11) Which of the following is the primary focus of managerial accounting?
b b b b b b b b b b
A) providing information that managers need to make operational decisions
b b b b b b b b
B) providing historical data to investors and creditors
b b b b b b
C) providing summarized results of operations b b b b
D) providing information to comply with laws and regulations of government bodies
b b b b b b b b b b
Answer: A
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge
b b b
AICPA Functional: Reporting
b b b
PE Question Type: Concept
b b b
H2: Why Is Managerial Accounting Important? (H1)
b b b b b b
12) Which of the following is the primary focus of financial accounting?
b b b b b b b b b b
A) providing information that managers need to make operational decisions
b b b b b b b b
B) providing summarized information on operational results to investors and creditors
b b b b b b b b b
C) providing information to managers to assist in planning, directing and controlling operations
b b b b b b b b b b b
D) providing highly detailed information on product lines, regions, and divisions
b b b b b b b b b
Answer: B
b b
Diff: 1 b
LO: M:1-1
b
AACSB: Application of knowledge b b b
