Managerial Accounting Final Exam Review/ Exam
Questions with Correct Verified Answers/ Rated A+
1. Which of the following best describes the primary difference
between managerial accounting and financial accounting?
a) Managerial accounting focuses on external users; financial
accounting focuses on internal users
b) Managerial accounting focuses on the past; financial
accounting focuses on the future
c) Managerial accounting focuses on internal users; financial
accounting focuses on external users
d) Managerial accounting is required by law; financial
accounting is optional
Correct Answer: c) Managerial accounting focuses on internal
users; financial accounting focuses on external users
Rationale: Managerial accounting provides information to
internal users (managers, executives) for planning, controlling,
1
,and decision-making. Financial accounting provides information
to external users (investors, creditors, regulators) for investment
and lending decisions . Managerial accounting is not required by
law and focuses on future-oriented, detailed, and timely
information.
2. Which of the following is a characteristic of managerial
accounting information?
a) Must be prepared in accordance with GAAP
b) Focuses on the organization as a whole
c) Emphasizes relevance and timeliness
d) Is primarily historical in nature
Correct Answer: c) Emphasizes relevance and timeliness
Rationale: Managerial accounting emphasizes relevance,
timeliness, and future orientation to support decision-making. It is
not required to follow GAAP, focuses on segments of the
organization, and uses both historical and estimated data .
2
,3. Which of the following costs would be classified as a direct
cost for a manufacturing company?
a) Factory rent
b) Depreciation on factory equipment
c) Raw materials used in production
d) Factory supervisor's salary
Correct Answer: c) Raw materials used in production
Rationale: Direct costs can be traced directly to a specific cost
object (product, department). Raw materials used in production
are direct materials that can be traced to each unit of product.
Factory rent, depreciation, and supervisor salaries are indirect
costs (overhead) that cannot be traced directly to individual
units .
4. Which of the following is NOT a manufacturing cost?
a) Direct materials
b) Manufacturing overhead
3
, c) Administrative costs
d) Direct labor
Correct Answer: c) Administrative costs
Rationale: Administrative costs are period costs, not
manufacturing costs. Manufacturing costs include direct materials,
direct labor, and manufacturing overhead .
5. Period costs are:
a) Always recorded as an expense
b) Always considered part of the inventory
c) Expensed only when the inventory is sold
d) None of these
Correct Answer: a) Always recorded as an expense
Rationale: Period costs are expensed in the period in which they
are incurred. They are not included in inventory costs .
6. Which of the following best describes a variable cost?
a) A cost that remains constant in total regardless of activity level
b) A cost that varies in total in direct proportion to changes in
4
Questions with Correct Verified Answers/ Rated A+
1. Which of the following best describes the primary difference
between managerial accounting and financial accounting?
a) Managerial accounting focuses on external users; financial
accounting focuses on internal users
b) Managerial accounting focuses on the past; financial
accounting focuses on the future
c) Managerial accounting focuses on internal users; financial
accounting focuses on external users
d) Managerial accounting is required by law; financial
accounting is optional
Correct Answer: c) Managerial accounting focuses on internal
users; financial accounting focuses on external users
Rationale: Managerial accounting provides information to
internal users (managers, executives) for planning, controlling,
1
,and decision-making. Financial accounting provides information
to external users (investors, creditors, regulators) for investment
and lending decisions . Managerial accounting is not required by
law and focuses on future-oriented, detailed, and timely
information.
2. Which of the following is a characteristic of managerial
accounting information?
a) Must be prepared in accordance with GAAP
b) Focuses on the organization as a whole
c) Emphasizes relevance and timeliness
d) Is primarily historical in nature
Correct Answer: c) Emphasizes relevance and timeliness
Rationale: Managerial accounting emphasizes relevance,
timeliness, and future orientation to support decision-making. It is
not required to follow GAAP, focuses on segments of the
organization, and uses both historical and estimated data .
2
,3. Which of the following costs would be classified as a direct
cost for a manufacturing company?
a) Factory rent
b) Depreciation on factory equipment
c) Raw materials used in production
d) Factory supervisor's salary
Correct Answer: c) Raw materials used in production
Rationale: Direct costs can be traced directly to a specific cost
object (product, department). Raw materials used in production
are direct materials that can be traced to each unit of product.
Factory rent, depreciation, and supervisor salaries are indirect
costs (overhead) that cannot be traced directly to individual
units .
4. Which of the following is NOT a manufacturing cost?
a) Direct materials
b) Manufacturing overhead
3
, c) Administrative costs
d) Direct labor
Correct Answer: c) Administrative costs
Rationale: Administrative costs are period costs, not
manufacturing costs. Manufacturing costs include direct materials,
direct labor, and manufacturing overhead .
5. Period costs are:
a) Always recorded as an expense
b) Always considered part of the inventory
c) Expensed only when the inventory is sold
d) None of these
Correct Answer: a) Always recorded as an expense
Rationale: Period costs are expensed in the period in which they
are incurred. They are not included in inventory costs .
6. Which of the following best describes a variable cost?
a) A cost that remains constant in total regardless of activity level
b) A cost that varies in total in direct proportion to changes in
4
