Test Bank for Horngren's Financial & Managerial Accounting, The Financial Chapters, Global Edition 7th Edition by Tracie Miller-Nobles, Brenda Mattison

TESTBANKr




Financial andManagerial 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 r Introduction toManagerial Accounting r r r




LearningObjective M:1-1 r r




1) Managerialaccountingfocusesonprovidinginformationforinternal planning andcontrol.
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Answer: TRUE
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LO: M:1-1
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AACSB: Application of knowledge
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AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accountingprovides
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information to external stakeholders.
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Answer: FALSE r




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




LO: M:1-1
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AACSB: Application of knowledge
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AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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3) Financial statements prepared for investors and creditors often include forward-looking information
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because they make decisions based on a company's future prospects.
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Answer: FALSE r




Explanation: Financial statements provide mostly historical information; relevant and faithfullyrepresentative
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information and focused on the past.
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge
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AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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4) Managerial accountingreportingby apublic firm isrequired to follow therulesof GAAP.Answer:
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FALSE
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Explanation: Managerial accounting information is not guided by GAAP but rather by the concept ofusefulness
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to management for decision making purposes.
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge
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AICPA Functional: Reporting
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PE Question Type: Concept
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,H2: Why IsManagerial Accounting Important? (H1)
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5) Financialreportingistypicallymuchmoredetailed thanmanagerialaccounting. r r r r r r r r r




Answer: FALSE
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Explanation: Financial reporting is typically less detailed than managerial accounting information. r r r r r r r r r r




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




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations,financial r r r r r r r r r r




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




Explanation: Managerialaccountingprovidestheinformationneededtoplanandcontroloperationsand r r r r r r r r r r r r




therefore serves the information needs of internal parties such as managers and staff.
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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7) Whichof thefollowingisa focusof managerial accounting?
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A) to generate acompany's financial statementsfor taxreporting
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B) to provideinformationto business managersto assistthem incontrollingtheir businesses
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C) to provideinformationto shareholdersto assistthem withtheir investmentdecisions
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D) to ensurethatthe reportsproduced forinternal and external businesspurposes are GAAPcompliantAnswer:
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B
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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8) Whichofthefollowingstatementsistrue ofmanagerial accounting?
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A) Theexternal stakeholders ofa company are theprimaryusersof managerial accounting.
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B) Managerial accountinginformationisusedto helpmanagersplan, directand control their operations. r r r r r r r r r r r r r




C) Anexternal auditbyan independent CPA isrequiredfor managerial accountinginformation.
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D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted AccountingPrinciples. r r r r r r r r r




Answer: B
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LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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, PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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9) Managerial accountinginformation foracompanyisprimarilyused by r r r r r r r r r .
A) itscustomers to understand the pricingof the product
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B) itscreditors to understand the credibility ofthe business
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C) itsemployeestoplan, direct and control operations
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D) itsinvestors to make theirinvestmentdecisions
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Answer: C
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why IsManagerial Accounting Important? (H1)
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10) Whichofthefollowingstatementsistrue of financial accounting?
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A) Itprovidesinformationto investors needed for their investmentdecisions.
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B) Itprovides futurefocused informationneeded formanaging anddelegating operations.
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C) Itfocuses on detailed reports for parts of the company rather than the whole company.
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D) It focuses on planning, directing and controlling day-to-day operations.
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Answer: A
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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11) Whichofthe followingisthe primary focusofmanagerial accounting?
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A) providinginformationthat managersneed tomake operationaldecisions r r r r r r r r




B) providinghistorical datato investors and creditors r r r r r r




C) providingsummarized resultsofoperations r r r r




D) providinginformationto complywithlawsand regulationsofgovernment bodies r r r r r r r r r r




Answer: A
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r




AICPA Functional: Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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12) Whichofthe followingis the primary focusof financial accounting?
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A) providinginformationthat managersneed tomake operationaldecisions r r r r r r r r




B) providingsummarized information onoperational results to investors and creditors
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C) providinginformationto managersto assistinplanning,directing and controllingoperations
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D) providinghighlydetailed informationonproductlines,regions,anddivisions r r r r r r r r r




Answer: B
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Diff: 1 r




LO: M:1-1
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AACSB: Application of knowledge r r r