TEST BANK
c
Financial and Managerial Accounting:
c c c
Managerial Chapters, 7th Edition
c c
c
(Miller-Nobles) Chapter 1-11
c c
,Chapter M:1 c Introduction to Managerial Accounting c c c
LearningObjectiveM:1-1 c c
1) Managerialaccountingfocusesonprovidinginformationforinternalplanning andcontrol.
c c c c c c c c c c c
Answer: TRUE
c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
c c c c c c c c c
provides informationto external stakeholders.
c c c c c
Answer: FALSE cc
Explanation: The reverse is true. Financial accounting servesexternal stakeholder information
c c c c c c c c c c
needswhile managerial accounting servesthe needs of managers and internal staff.
c c c c c c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
3) Financial statements prepared forinvestors and creditors often include forward-looking
c c c c c c c c c
information because they make decisions based on a company's future prospects.
c c c c c c c c c c c
Answer: FALSE cc
Explanation: Financialstatements providemostly historical information; relevantand
c c c c c c c c
faithfully representative information and focused on the past.
c c c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
4) Managerial accounting reporting by a public firm isrequired to follow the rules of GAAP.
c c c c c c c c c c c c c c
Answer: FALSE
cc c
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
c c c c c c c c c c c c c c
cusefulnessto management for decision making purposes.
c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
,H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
5) Financialreportingistypicallymuchmoredetailed thanmanagerial
c c c c c c c c
accounting. Answer: FALSE
c cc c
Explanation: Financial reporting is typically less detailed than managerial accounting
c c c c c c c c c
information. Financial accounting reporting is usually summary reports, prepared primarily on
c c c c c c c c c c c
the company as a whole, usually on a quarterly or annual basis.
c c c c c c c c c c c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, c c c c c c c c c
financial position, and cash flows both to managers and to external stockholders.
c c c c c c c c c c c c
Answer: FALSE cc
Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
c c c c c c c c c c c c
ctherefore serves the information needs of internal parties such as managers and staff.
c c c c c c c c c c c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
7) Which of the following isa focus of managerial accounting?
c c c c c c c c c
A) to generate acompany's financial statementsfor taxreporting
c c c c c c c c
B) to provideinformation to business managers to assist them in controllingtheir businesses
c c c c c c c c c c c c
C) to provideinformation to shareholders to assistthem withtheir investment decisions
c c c c c c c c c c c
D) to ensure that thereports produced for internal and external businesspurposes are GAAPcompliant
c c c c c c c c c c c c c c c
Answer: B
c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
8) Whichofthefollowing statementsistrue ofmanagerial accounting?
c c c c c c c c c
A) The external stakeholders ofacompany are theprimaryusers of managerial accounting.
c c c c c c c c c c c c
B) Managerial accounting information isused to helpmanagers plan, direct and control their operations.
c c c c c c c c c c c c c
C) Anexternal auditbyan independent CPA isrequired for managerial accountinginformation.
c c c c c c c c c c c c
D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting c c c c c c c c
Principles. Answer: B
c cc c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
, knowledge AICPA Functional:
c c c
Reporting
c
c
Financial and Managerial Accounting:
c c c
Managerial Chapters, 7th Edition
c c
c
(Miller-Nobles) Chapter 1-11
c c
,Chapter M:1 c Introduction to Managerial Accounting c c c
LearningObjectiveM:1-1 c c
1) Managerialaccountingfocusesonprovidinginformationforinternalplanning andcontrol.
c c c c c c c c c c c
Answer: TRUE
c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerial accounting
c c c c c c c c c
provides informationto external stakeholders.
c c c c c
Answer: FALSE cc
Explanation: The reverse is true. Financial accounting servesexternal stakeholder information
c c c c c c c c c c
needswhile managerial accounting servesthe needs of managers and internal staff.
c c c c c c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
3) Financial statements prepared forinvestors and creditors often include forward-looking
c c c c c c c c c
information because they make decisions based on a company's future prospects.
c c c c c c c c c c c
Answer: FALSE cc
Explanation: Financialstatements providemostly historical information; relevantand
c c c c c c c c
faithfully representative information and focused on the past.
c c c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
4) Managerial accounting reporting by a public firm isrequired to follow the rules of GAAP.
c c c c c c c c c c c c c c
Answer: FALSE
cc c
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
c c c c c c c c c c c c c c
cusefulnessto management for decision making purposes.
c c c c c c
Diff: 1 c
LO: M:1-1c c
AACSB: Application of
c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
,H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
5) Financialreportingistypicallymuchmoredetailed thanmanagerial
c c c c c c c c
accounting. Answer: FALSE
c cc c
Explanation: Financial reporting is typically less detailed than managerial accounting
c c c c c c c c c
information. Financial accounting reporting is usually summary reports, prepared primarily on
c c c c c c c c c c c
the company as a whole, usually on a quarterly or annual basis.
c c c c c c c c c c c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
6) Managerialaccountingprovidesfinancial statementsthatreportresultsofoperations, c c c c c c c c c
financial position, and cash flows both to managers and to external stockholders.
c c c c c c c c c c c c
Answer: FALSE cc
Explanation: Managerialaccountingprovidestheinformationneededtoplanand controloperationsand
c c c c c c c c c c c c
ctherefore serves the information needs of internal parties such as managers and staff.
c c c c c c c c c c c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
7) Which of the following isa focus of managerial accounting?
c c c c c c c c c
A) to generate acompany's financial statementsfor taxreporting
c c c c c c c c
B) to provideinformation to business managers to assist them in controllingtheir businesses
c c c c c c c c c c c c
C) to provideinformation to shareholders to assistthem withtheir investment decisions
c c c c c c c c c c c
D) to ensure that thereports produced for internal and external businesspurposes are GAAPcompliant
c c c c c c c c c c c c c c c
Answer: B
c c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
knowledge AICPA Functional:
c c c
Reporting
c
PE Question Type: Concept
c c c c
H2: Why Is Managerial Accounting Important? (H1)
c c c c c c c
8) Whichofthefollowing statementsistrue ofmanagerial accounting?
c c c c c c c c c
A) The external stakeholders ofacompany are theprimaryusers of managerial accounting.
c c c c c c c c c c c c
B) Managerial accounting information isused to helpmanagers plan, direct and control their operations.
c c c c c c c c c c c c c
C) Anexternal auditbyan independent CPA isrequired for managerial accountinginformation.
c c c c c c c c c c c c
D) ManagerialaccountinginformationmustcomplywithGenerallyAccepted Accounting c c c c c c c c
Principles. Answer: B
c cc c
Diff: 1 c
LO: M:1-1
c c
AACSB: Application of c c
, knowledge AICPA Functional:
c c c
Reporting
c
