TEST BANKn
Financial and Managerial Accounting:
n n n
Managerial Chapters, 7th
n n
Edition
n
(Miller-Nobles) Chapter 1-11
n n
,Chapter nM:1 Introduction nto nManagerial nAccounting
Learning nObjective nM:1-1
1) Managerial naccounting nfocuses non nproviding ninformation nfor ninternal nplanning nand
ncontrol. n nAnswer: n TRUE
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
2) Financial naccounting nprepares nreports nfor ninternal npurposes, nwhereas nmanagerial naccounting
nprovides n information nto nexternal nstakeholders.
Answer: n nFALSE
Explanation: nThe nreverse nis ntrue. nFinancial naccounting nserves nexternal nstakeholder ninformation
nneedswhile n managerial naccounting nserves nthe nneeds nof nmanagers nand ninternal nstaff.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
3) Financial nstatements nprepared nfor ninvestors nand ncreditors noften ninclude nforward-looking
ninformation n because nthey nmake ndecisions nbased non na ncompany's nfuture nprospects.
Answer: n nFALSE
Explanation: nFinancial nstatements nprovide nmostly nhistorical ninformation; nrelevant nand
nfaithfully n representative ninformation nand nfocused non nthe npast.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
4) Managerial naccounting nreporting nby na npublic nfirm nis nrequired nto nfollow nthe nrules
nof nGAAP. n nAnswer: n FALSE
Explanation: nManagerial naccounting ninformation nis nnot nguided nby nGAAP nbut nrather nby nthe
nconcept nof n usefulness nto nmanagement nfor ndecision nmaking npurposes.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
,H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
5) Financial nreporting nis ntypically nmuch nmore ndetailed nthan nmanagerial
naccounting. n nAnswer: n FALSE
Explanation: n Financial n reporting n is n typically n less n detailed n than n managerial
n accounting n information. n Financial n accounting n reporting n is n usually nsummary n reports,
n prepared n primarily n on n the n company n as n a n whole, nusually non na nquarterly nor nannual
nbasis.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
6) Managerial naccounting nprovides nfinancial nstatements nthat nreport nresults nof noperations,
nfinancial n position, nand ncash nflows nboth nto nmanagers nand nto nexternal nstockholders.
Answer: n nFALSE
Explanation: nManagerial naccounting nprovides nthe ninformation nneeded nto nplan nand ncontrol
noperations nand n therefore nserves nthe ninformation nneeds nof ninternal nparties nsuch nas nmanagers
nand nstaff.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
7) Which nof nthe nfollowing nis na nfocus nof nmanagerial naccounting?
A) to ngenerate na ncompany's nfinancial nstatements nfor ntax nreporting
B) to nprovide ninformation nto nbusiness nmanagers nto nassist nthem nin ncontrolling ntheir nbusinesses
C) to nprovide ninformation nto nshareholders nto nassist nthem nwith ntheir ninvestment ndecisions
D) to nensure nthat nthe nreports nproduced nfor ninternal nand nexternal nbusiness npurposes nare nGAAP
ncompliant n nAnswer: n B
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
8) Which nof nthe nfollowing nstatements nis ntrue nof nmanagerial naccounting?
A) The nexternal nstakeholders nof na ncompany nare nthe nprimary nusers nof nmanagerial naccounting.
B) Managerial naccounting ninformation nis nused nto nhelp nmanagers nplan, ndirect nand ncontrol ntheir
operations.
n
C) An nexternal naudit nby nan nindependent nCPA nis nrequired nfor nmanagerial naccounting ninformation.
D) Managerial naccounting ninformation nmust ncomply nwith nGenerally nAccepted nAccounting
Principles. n nAnswer: n B
n
, Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
Financial and Managerial Accounting:
n n n
Managerial Chapters, 7th
n n
Edition
n
(Miller-Nobles) Chapter 1-11
n n
,Chapter nM:1 Introduction nto nManagerial nAccounting
Learning nObjective nM:1-1
1) Managerial naccounting nfocuses non nproviding ninformation nfor ninternal nplanning nand
ncontrol. n nAnswer: n TRUE
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
2) Financial naccounting nprepares nreports nfor ninternal npurposes, nwhereas nmanagerial naccounting
nprovides n information nto nexternal nstakeholders.
Answer: n nFALSE
Explanation: nThe nreverse nis ntrue. nFinancial naccounting nserves nexternal nstakeholder ninformation
nneedswhile n managerial naccounting nserves nthe nneeds nof nmanagers nand ninternal nstaff.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
3) Financial nstatements nprepared nfor ninvestors nand ncreditors noften ninclude nforward-looking
ninformation n because nthey nmake ndecisions nbased non na ncompany's nfuture nprospects.
Answer: n nFALSE
Explanation: nFinancial nstatements nprovide nmostly nhistorical ninformation; nrelevant nand
nfaithfully n representative ninformation nand nfocused non nthe npast.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
4) Managerial naccounting nreporting nby na npublic nfirm nis nrequired nto nfollow nthe nrules
nof nGAAP. n nAnswer: n FALSE
Explanation: nManagerial naccounting ninformation nis nnot nguided nby nGAAP nbut nrather nby nthe
nconcept nof n usefulness nto nmanagement nfor ndecision nmaking npurposes.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
,H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
5) Financial nreporting nis ntypically nmuch nmore ndetailed nthan nmanagerial
naccounting. n nAnswer: n FALSE
Explanation: n Financial n reporting n is n typically n less n detailed n than n managerial
n accounting n information. n Financial n accounting n reporting n is n usually nsummary n reports,
n prepared n primarily n on n the n company n as n a n whole, nusually non na nquarterly nor nannual
nbasis.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
6) Managerial naccounting nprovides nfinancial nstatements nthat nreport nresults nof noperations,
nfinancial n position, nand ncash nflows nboth nto nmanagers nand nto nexternal nstockholders.
Answer: n nFALSE
Explanation: nManagerial naccounting nprovides nthe ninformation nneeded nto nplan nand ncontrol
noperations nand n therefore nserves nthe ninformation nneeds nof ninternal nparties nsuch nas nmanagers
nand nstaff.
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
7) Which nof nthe nfollowing nis na nfocus nof nmanagerial naccounting?
A) to ngenerate na ncompany's nfinancial nstatements nfor ntax nreporting
B) to nprovide ninformation nto nbusiness nmanagers nto nassist nthem nin ncontrolling ntheir nbusinesses
C) to nprovide ninformation nto nshareholders nto nassist nthem nwith ntheir ninvestment ndecisions
D) to nensure nthat nthe nreports nproduced nfor ninternal nand nexternal nbusiness npurposes nare nGAAP
ncompliant n nAnswer: n B
Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
PE nQuestion nType: n n Concept
H2: n nWhy nIs nManagerial nAccounting nImportant? n(H1)
8) Which nof nthe nfollowing nstatements nis ntrue nof nmanagerial naccounting?
A) The nexternal nstakeholders nof na ncompany nare nthe nprimary nusers nof nmanagerial naccounting.
B) Managerial naccounting ninformation nis nused nto nhelp nmanagers nplan, ndirect nand ncontrol ntheir
operations.
n
C) An nexternal naudit nby nan nindependent nCPA nis nrequired nfor nmanagerial naccounting ninformation.
D) Managerial naccounting ninformation nmust ncomply nwith nGenerally nAccepted nAccounting
Principles. n nAnswer: n B
n
, Diff: n1
LO: n n M:1-1
AACSB: n Application nof
nknowledge n AICPA nFunctional:
n Reporting
