TEST BANK Financial and Managerial Accounting: Managerial Chapters, 7 th Edition (Miller-Nobles) Chapter 1-11

TEST BANKb




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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b

PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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 needs
b b b b b b b b b b b


while managerial accounting serves the needs of managers and internal staff.
b b b b b b b b b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b

PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

3) Financial statements prepared for investors and creditors often include forward-looking
b b b b b b b b b


binformationbecause 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 faithfully
b b b b b b b b b


representative information and focused on the past.
b b b b b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept

,H2: b Why bIs bManagerial bAccounting bImportant? b(H1)




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
b b b b b b b b b b b b b


awhole, usually on a quarterly or annual basis.
b b b b b b b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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
b b b b b b b b b b b b b


compliantAnswer: B
b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b

, PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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
b b b b b


decisionsAnswer: C
b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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
b b b b b b b


operations.Answer: A
b b b


Diff: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge
AICPA bFunctional: b Reporting
b


PE bQuestion bType: b Concept
H2: b Why bIs bManagerial bAccounting bImportant? b(H1)

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: b1
LO: b M:1-1
AACSB: b Application bof bknowledge