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




LearningObjectiveM:1-1 n n




1) Managerial accountingfocusesonprovidinginformationforinternal planning andcontrol.
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Answer: TRUE
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Diff: 1 n




LO: M:1-1
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AACSB: Application of n n




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) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
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provides informationto external stakeholders.
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Answer: FALSE nn




Explanation: The reverse is true. Financial accounting serves external stakeholder information
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needswhile managerial accounting servesthe needs of managers and internal staff.
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Diff: 1 n




LO: M:1-1
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AACSB: Application of n n




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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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 nn




Explanation: Financial statements provide mostly historical information; relevantand
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faithfully representative information and focused on the past.
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Diff: 1 n




LO: M:1-1
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AACSB: Application of n n




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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4) Managerial accounting reporting by a public firm isrequired 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 of
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nusefulnessto management for decision making purposes.
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Diff: 1 n




LO: M:1-1
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AACSB: Application of n n




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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5) Financialreportingistypically muchmoredetailed 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. Financial accounting reporting is usually summary reports, prepared primarily on
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the company as a whole, usually on a quarterly or annual basis.
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Diff: 1 n




LO: M:1-1n n




AACSB: Application of n n




knowledge AICPA Functional:
n n n




Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, n n n n n n n n n




financial position, and cash flows both to managers and to external stockholders.
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Answer: FALSE nn




Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
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ntherefore serves the information needs of internal parties such as managers and staff.
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Diff: 1 n




LO: M:1-1n n




AACSB: Application of n n




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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7) Which of the following isa focus of managerial accounting?
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A) to generate acompany's financial statements for taxreporting
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B) to provideinformation to business managers to assist them in controlling their businesses
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C) to provideinformation to shareholders to assistthem with their investment decisions
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D) to ensure that the reports produced for internal and external business purposes are GAAPcompliant
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Answer: B
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Diff: 1 n




LO: M:1-1n n




AACSB: Application of n n




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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8) Whichof thefollowing statementsistrue of managerial accounting?
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A) The external stakeholders ofa company are theprimaryusers of managerial accounting.
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B) Managerial accounting information isused to help managers plan, direct and control their operations.
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C) Anexternal auditby an independent CPA isrequired for managerial accounting information.
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D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting n n n n n n n n




Principles. Answer: B
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Diff: 1 n




LO: M:1-1n n




AACSB: Application of n n

, knowledge AICPA Functional:
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Reporting
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