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