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
LearningObjectiveM:1-1 n n
1) Managerial accountingfocusesonprovidinginformationforinternal planning andcontrol.
n n n n n n n n n n n
Answer: TRUE
n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
n n n n n n n n n
provides informationto external stakeholders.
n n n n n
Answer: FALSE nn
Explanation: The reverse is true. Financial accounting serves external stakeholder information
n n n n n n n n n n
needswhile managerial accounting servesthe needs of managers and internal staff.
n n n n n n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
3) Financial statements prepared for investors and creditors often include forward-looking
n n n n n n n n n
information because they make decisions based on a company's future prospects.
n n n n n n n n n n n
Answer: FALSE nn
Explanation: Financial statements provide mostly historical information; relevantand
n n n n n n n n
faithfully representative information and focused on the past.
n n n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
4) Managerial accounting reporting by a public firm isrequired to follow the rules of
n n n n n n n n n n n n n
GAAP. Answer: FALSE
n nn 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
nusefulnessto management for decision making purposes.
n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
,H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
5) Financialreportingistypically muchmoredetailed than managerial
n n n n n n n n
accounting. Answer: FALSE
n nn n
Explanation: Financial reporting is typically less detailed than managerial accounting
n n n n n n n n n
information. Financial accounting reporting is usually summary reports, prepared primarily on
n n n n n n n n n n n
the company as a whole, usually on a quarterly or annual basis.
n n n n n n n n n n n n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, n n n n n n n n n
financial position, and cash flows both to managers and to external stockholders.
n n n n n n n n n n n n
Answer: FALSE nn
Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
n n n n n n n n n n n n
ntherefore serves the information needs of internal parties such as managers and staff.
n n n n n n n n n n n n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
7) Which of the following isa focus of managerial accounting?
n n n n n n n n n
A) to generate acompany's financial statements for taxreporting
n n n n n n n n
B) to provideinformation to business managers to assist them in controlling their businesses
n n n n n n n n n n n n
C) to provideinformation to shareholders to assistthem 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 GAAPcompliant
n n n n n n n n n n n n n n
Answer: B
nn n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
8) Whichof thefollowing statementsistrue of managerial accounting?
n n n n n n n n n
A) The external stakeholders ofa company are theprimaryusers of managerial accounting.
n n n n n n n n n n n n
B) Managerial accounting information isused to help managers plan, direct and control their operations.
n n n n n n n n n n n n n
C) Anexternal auditby an independent CPA isrequired for managerial accounting information.
n n n n n n n n n n n n
D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting n n n n n n n n
Principles. Answer: B
n nn n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
, knowledge AICPA Functional:
n n n
Reporting
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
LearningObjectiveM:1-1 n n
1) Managerial accountingfocusesonprovidinginformationforinternal planning andcontrol.
n n n n n n n n n n n
Answer: TRUE
n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
n n n n n n n n n
provides informationto external stakeholders.
n n n n n
Answer: FALSE nn
Explanation: The reverse is true. Financial accounting serves external stakeholder information
n n n n n n n n n n
needswhile managerial accounting servesthe needs of managers and internal staff.
n n n n n n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
3) Financial statements prepared for investors and creditors often include forward-looking
n n n n n n n n n
information because they make decisions based on a company's future prospects.
n n n n n n n n n n n
Answer: FALSE nn
Explanation: Financial statements provide mostly historical information; relevantand
n n n n n n n n
faithfully representative information and focused on the past.
n n n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
4) Managerial accounting reporting by a public firm isrequired to follow the rules of
n n n n n n n n n n n n n
GAAP. Answer: FALSE
n nn 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
nusefulnessto management for decision making purposes.
n n n n n n
Diff: 1 n
LO: M:1-1
n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
,H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
5) Financialreportingistypically muchmoredetailed than managerial
n n n n n n n n
accounting. Answer: FALSE
n nn n
Explanation: Financial reporting is typically less detailed than managerial accounting
n n n n n n n n n
information. Financial accounting reporting is usually summary reports, prepared primarily on
n n n n n n n n n n n
the company as a whole, usually on a quarterly or annual basis.
n n n n n n n n n n n n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, n n n n n n n n n
financial position, and cash flows both to managers and to external stockholders.
n n n n n n n n n n n n
Answer: FALSE nn
Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
n n n n n n n n n n n n
ntherefore serves the information needs of internal parties such as managers and staff.
n n n n n n n n n n n n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
7) Which of the following isa focus of managerial accounting?
n n n n n n n n n
A) to generate acompany's financial statements for taxreporting
n n n n n n n n
B) to provideinformation to business managers to assist them in controlling their businesses
n n n n n n n n n n n n
C) to provideinformation to shareholders to assistthem 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 GAAPcompliant
n n n n n n n n n n n n n n
Answer: B
nn n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
knowledge AICPA Functional:
n n n
Reporting
n
PE Question Type: Concept
n n n n
H2: Why Is Managerial Accounting Important? (H1)
n n n n n n n
8) Whichof thefollowing statementsistrue of managerial accounting?
n n n n n n n n n
A) The external stakeholders ofa company are theprimaryusers of managerial accounting.
n n n n n n n n n n n n
B) Managerial accounting information isused to help managers plan, direct and control their operations.
n n n n n n n n n n n n n
C) Anexternal auditby an independent CPA isrequired for managerial accounting information.
n n n n n n n n n n n n
D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting n n n n n n n n
Principles. Answer: B
n nn n
Diff: 1 n
LO: M:1-1n n
AACSB: Application of n n
, knowledge AICPA Functional:
n n n
Reporting
n
