BUS500
Accounting For Managers
Comprehensive Finals Review (Qns & Ans)
2025
1. Which of the following financial statements provides a
snapshot of a company's financial position at a specific point in
time?
- A) Income Statement
- B) Balance Sheet
- C) Cash Flow Statement
- D) Statement of Retained Earnings
- ANS: B) Balance Sheet
©2024/2025
, - Rationale: The balance sheet provides a snapshot of a
company's financial position at a specific point in time, showing
assets, liabilities, and equity.
2. What is the primary purpose of managerial accounting?
- A) To prepare financial statements for external stakeholders
- B) To provide information for internal decision-making
- C) To comply with tax regulations
- D) To audit financial records
- ANS: B) To provide information for internal decision-
making
- Rationale: Managerial accounting focuses on providing
information for internal decision-making to help managers plan,
control, and evaluate business operations.
3. Which of the following is NOT a component of the cost of
goods sold (COGS)?
- A) Direct materials
- B) Direct labor
- C) Administrative expenses
- D) Manufacturing overhead
- ANS: C) Administrative expenses
©2024/2025
, - Rationale: Administrative expenses are not included in the
cost of goods sold (COGS); COGS includes direct materials,
direct labor, and manufacturing overhead.
Fill-in-the-Blank Questions
4. The __________ margin ratio measures the percentage of
sales revenue that exceeds the cost of goods sold.
- ANS: Gross profit
- Rationale: The gross profit margin ratio measures the
percentage of sales revenue that exceeds the cost of goods sold,
indicating the efficiency of production.
5. In budgeting, a __________ variance occurs when actual
costs are higher than budgeted costs.
- ANS: Unfavorable
- Rationale: An unfavorable variance occurs when actual
costs are higher than budgeted costs, indicating a negative
deviation from the budget.
6. The __________ principle requires that revenue be
recognized when it is earned, regardless of when payment is
received.
- ANS: Revenue recognition
©2024/2025
, - Rationale: The revenue recognition principle requires that
revenue be recognized when it is earned, regardless of when
payment is received, ensuring accurate financial reporting.
True/False Questions
7. True or False: Managerial accounting reports are primarily
intended for external stakeholders such as investors and creditors.
- ANS: False
- Rationale: Managerial accounting reports are primarily
intended for internal stakeholders, such as managers and
employees, to aid in decision-making.
8. True or False: The matching principle requires that expenses
be matched with the revenue they help generate.
- ANS: True
- Rationale: The matching principle requires that expenses be
matched with the revenue they help generate, ensuring accurate
financial reporting.
9. True or False: Fixed costs remain constant regardless of
changes in production levels.
- ANS: True
- Rationale: Fixed costs remain constant regardless of
changes in production levels, as they do not vary with output.
©2024/2025
Accounting For Managers
Comprehensive Finals Review (Qns & Ans)
2025
1. Which of the following financial statements provides a
snapshot of a company's financial position at a specific point in
time?
- A) Income Statement
- B) Balance Sheet
- C) Cash Flow Statement
- D) Statement of Retained Earnings
- ANS: B) Balance Sheet
©2024/2025
, - Rationale: The balance sheet provides a snapshot of a
company's financial position at a specific point in time, showing
assets, liabilities, and equity.
2. What is the primary purpose of managerial accounting?
- A) To prepare financial statements for external stakeholders
- B) To provide information for internal decision-making
- C) To comply with tax regulations
- D) To audit financial records
- ANS: B) To provide information for internal decision-
making
- Rationale: Managerial accounting focuses on providing
information for internal decision-making to help managers plan,
control, and evaluate business operations.
3. Which of the following is NOT a component of the cost of
goods sold (COGS)?
- A) Direct materials
- B) Direct labor
- C) Administrative expenses
- D) Manufacturing overhead
- ANS: C) Administrative expenses
©2024/2025
, - Rationale: Administrative expenses are not included in the
cost of goods sold (COGS); COGS includes direct materials,
direct labor, and manufacturing overhead.
Fill-in-the-Blank Questions
4. The __________ margin ratio measures the percentage of
sales revenue that exceeds the cost of goods sold.
- ANS: Gross profit
- Rationale: The gross profit margin ratio measures the
percentage of sales revenue that exceeds the cost of goods sold,
indicating the efficiency of production.
5. In budgeting, a __________ variance occurs when actual
costs are higher than budgeted costs.
- ANS: Unfavorable
- Rationale: An unfavorable variance occurs when actual
costs are higher than budgeted costs, indicating a negative
deviation from the budget.
6. The __________ principle requires that revenue be
recognized when it is earned, regardless of when payment is
received.
- ANS: Revenue recognition
©2024/2025
, - Rationale: The revenue recognition principle requires that
revenue be recognized when it is earned, regardless of when
payment is received, ensuring accurate financial reporting.
True/False Questions
7. True or False: Managerial accounting reports are primarily
intended for external stakeholders such as investors and creditors.
- ANS: False
- Rationale: Managerial accounting reports are primarily
intended for internal stakeholders, such as managers and
employees, to aid in decision-making.
8. True or False: The matching principle requires that expenses
be matched with the revenue they help generate.
- ANS: True
- Rationale: The matching principle requires that expenses be
matched with the revenue they help generate, ensuring accurate
financial reporting.
9. True or False: Fixed costs remain constant regardless of
changes in production levels.
- ANS: True
- Rationale: Fixed costs remain constant regardless of
changes in production levels, as they do not vary with output.
©2024/2025
