Test Bank for Horngren's Financial & Managerial Accounting, The Financial Chapters, Global Edition 7th Edition by Tracie Miller-Nobles, Brenda Mattison

TEST BANK
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Financial and Managerial Accounting:
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Managerial Chapters, 7th Edition
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c




(Miller-Nobles) Chapter 1-11
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,Chapter M:1 c Introduction to Managerial Accounting c c c




LearningObjectiveM:1-1 c c




1) Managerialaccountingfocusesonprovidinginformationforinternalplanning andcontrol.
c c c c c c c c c c c




Answer: TRUE
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Diff: 1 c




LO: M:1-1c c




AACSB: Application of
c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
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2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
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provides informationto external stakeholders.
c c c c c




Answer: FALSE cc




Explanation: The reverse is true. Financial accounting servesexternal stakeholder information
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needswhile managerial accounting servesthe needs of managers and internal staff.
c c c c c c c c c c c




Diff: 1 c




LO: M:1-1c c




AACSB: Application of
c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




3) Financial statements prepared forinvestors and creditors often include forward-looking
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information because they make decisions based on a company's future prospects.
c c c c c c c c c c c




Answer: FALSE cc




Explanation: Financialstatements providemostly historical information; relevantand
c c c c c c c c




faithfully representative information and focused on the past.
c c c c c c c c




Diff: 1 c




LO: M:1-1c c




AACSB: Application of
c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




4) Managerial accounting reporting by a public firm isrequired to follow the rules of GAAP.
c c c c c c c c c c c c c c




Answer: FALSE
cc c




Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
c c c c c c c c c c c c c c




cusefulnessto management for decision making purposes.
c c c c c c




Diff: 1 c




LO: M:1-1c c




AACSB: Application of
c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c

,H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




5) Financialreportingistypicallymuchmoredetailed thanmanagerial
c c c c c c c c




accounting. Answer: FALSE
c cc c




Explanation: Financial reporting is typically less detailed than managerial accounting
c c c c c c c c c




information. Financial accounting reporting is usually summary reports, prepared primarily on
c c c c c c c c c c c




the company as a whole, usually on a quarterly or annual basis.
c c c c c c c c c c c c




Diff: 1 c




LO: M:1-1
c c




AACSB: Application of c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, c c c c c c c c c




financial position, and cash flows both to managers and to external stockholders.
c c c c c c c c c c c c




Answer: FALSE cc




Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
c c c c c c c c c c c c




ctherefore serves the information needs of internal parties such as managers and staff.
c c c c c c c c c c c c




Diff: 1 c




LO: M:1-1
c c




AACSB: Application of c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




7) Which of the following isa focus of managerial accounting?
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A) to generate acompany's financial statementsfor taxreporting
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B) to provideinformation to business managers to assist them in controllingtheir businesses
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C) to provideinformation to shareholders to assistthem withtheir investment decisions
c c c c c c c c c c c




D) to ensure that thereports produced for internal and external businesspurposes are GAAPcompliant
c c c c c c c c c c c c c c c




Answer: B
c c




Diff: 1 c




LO: M:1-1
c c




AACSB: Application of c c




knowledge AICPA Functional:
c c c




Reporting
c




PE Question Type: Concept
c c c c




H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c




8) Whichofthefollowing statementsistrue ofmanagerial accounting?
c c c c c c c c c




A) The external stakeholders ofacompany are theprimaryusers of managerial accounting.
c c c c c c c c c c c c




B) Managerial accounting information isused to helpmanagers plan, direct and control their operations.
c c c c c c c c c c c c c




C) Anexternal auditbyan independent CPA isrequired for managerial accountinginformation.
c c c c c c c c c c c c




D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting c c c c c c c c




Principles. Answer: B
c cc c




Diff: 1 c




LO: M:1-1
c c




AACSB: Application of c c

, knowledge AICPA Functional:
c c c




Reporting
c