TEST BANK
Financial and Managerial Accounting:
Managerial Chapters, 7th Edition
(Miller-Nobles) Chapter 1-11
,Chapter M:1 D Introduction to Managerial Accounting D D D
Learning Objective M:1-1
D D
1) Managerial accounting focuses on providing information for internal planning and
D D D D D D D D D
Dcontrol. Answer: TRUE
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
D D D D D D D D D
Dprovides information to external stakeholders.
D D D D
Answer: FALSE D
Explanation: The reverse is true. Financial accounting serves external stakeholder information needs
D D D D D D D D D D D
while managerial accounting serves the needs of managers and internal staff.
D D D D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
3) Financial statements prepared for investors and creditors often include forward-looking
D D D D D D D D D
Dinformation because they make decisions based on a company's future prospects.
D D D D D D D D D D
Answer: FALSE D
Explanation: Financial statements provide mostly historical information; relevant and faithfully
D D D D D D D D D
representative information and focused on the past.
D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
4) Managerial accounting reporting by a public firm is required to follow the rules of
D D D D D D D D D D D D D
DGAAP. Answer: FALSE
D D
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
D D D D D D D D D D D D D D
usefulness to management for decision making purposes.
D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
,H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
5) Financial reporting is typically much more detailed than managerial
D D D D D D D D
Daccounting. Answer: FALSE D D
Explanation: Financial reporting is typically less detailed than managerial accounting information.
D D D D D D D D D D
DFinancial accounting reporting is usually summary reports, prepared primarily on the company as
D D D D D D D D D D D D
Da whole, usually on a quarterly or annual basis.
D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
6) Managerial accounting provides financial statements that report results of operations,
D D D D D D D D D
Dfinancial position, and cash flows both to managers and to external stockholders.
D D D D D D D D D D D
Answer: FALSE D
Explanation: Managerial accounting provides the information needed to plan and control operations
D D D D D D D D D D D
and therefore serves the information needs of internal parties such as managers and staff.
D D D D D D D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
7) Which of the following is a focus of managerial accounting?
D D D D D D D D D
A) to generate a company's financial statements for tax reporting
D D D D D D D D
B) to provide information to business managers to assist them in controlling their businesses
D D D D D D D D D D D D
C) to provide information to shareholders to assist them with their investment decisions
D D D D D D D D D D D
D) to ensure that the reports produced for internal and external business purposes are GAAP
D D D D D D D D D D D D D
Dcompliant Answer: B D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
8) Which of the following statements is true of managerial accounting?
D D D D D D D D D
A) The external stakeholders of a company are the primary users of managerial accounting.
D D D D D D D D D D D D
B) Managerial accounting information is used to help managers plan, direct and control their operations.
D D D D D D D D D D D D D
C) An external audit by an independent CPA is required for managerial accounting information.
D D D D D D D D D D D D
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
D D D D D D D D D
Answer: B
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
, PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
9) Managerial accounting information for a company is primarily used by
D D D D D D D D D .
A) its customers to understand the pricing of the product
D D D D D D D D
B) its creditors to understand the credibility of the business
D D D D D D D D
C) its employees to plan, direct and control operations
D D D D D D D
D) its investors to make their investment
D D D D D
Ddecisions Answer: C D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
10) Which of the following statements is true of financial accounting?
D D D D D D D D D
A) It provides information to investors needed for their investment decisions.
D D D D D D D D D
B) It provides future focused information needed for managing and delegating operations.
D D D D D D D D D D
C) It focuses on detailed reports for parts of the company rather than the whole company.
D D D D D D D D D D D D D D
D) It focuses on planning, directing and controlling day-to-day
D D D D D D D
Doperations. Answer: A D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
11) Which of the following is the primary focus of managerial accounting?
D D D D D D D D D D
A) providing information that managers need to make operational decisions
D D D D D D D D
B) providing historical data to investors and creditors
D D D D D D
C) providing summarized results of operations
D D D D
D) providing information to comply with laws and regulations of government
D D D D D D D D D
Dbodies Answer: A
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
12) Which of the following is the primary focus of financial accounting?
D D D D D D D D D D
A) providing information that managers need to make operational decisions
D D D D D D D D
B) providing summarized information on operational results to investors and creditors
D D D D D D D D D
C) providing information to managers to assist in planning, directing and controlling operations
D D D D D D D D D D D
D) providing highly detailed information on product lines, regions, and divisions
D D D D D D D D D
Answer: B
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
Financial and Managerial Accounting:
Managerial Chapters, 7th Edition
(Miller-Nobles) Chapter 1-11
,Chapter M:1 D Introduction to Managerial Accounting D D D
Learning Objective M:1-1
D D
1) Managerial accounting focuses on providing information for internal planning and
D D D D D D D D D
Dcontrol. Answer: TRUE
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
D D D D D D D D D
Dprovides information to external stakeholders.
D D D D
Answer: FALSE D
Explanation: The reverse is true. Financial accounting serves external stakeholder information needs
D D D D D D D D D D D
while managerial accounting serves the needs of managers and internal staff.
D D D D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
3) Financial statements prepared for investors and creditors often include forward-looking
D D D D D D D D D
Dinformation because they make decisions based on a company's future prospects.
D D D D D D D D D D
Answer: FALSE D
Explanation: Financial statements provide mostly historical information; relevant and faithfully
D D D D D D D D D
representative information and focused on the past.
D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
4) Managerial accounting reporting by a public firm is required to follow the rules of
D D D D D D D D D D D D D
DGAAP. Answer: FALSE
D D
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of
D D D D D D D D D D D D D D
usefulness to management for decision making purposes.
D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
,H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
5) Financial reporting is typically much more detailed than managerial
D D D D D D D D
Daccounting. Answer: FALSE D D
Explanation: Financial reporting is typically less detailed than managerial accounting information.
D D D D D D D D D D
DFinancial accounting reporting is usually summary reports, prepared primarily on the company as
D D D D D D D D D D D D
Da whole, usually on a quarterly or annual basis.
D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
6) Managerial accounting provides financial statements that report results of operations,
D D D D D D D D D
Dfinancial position, and cash flows both to managers and to external stockholders.
D D D D D D D D D D D
Answer: FALSE D
Explanation: Managerial accounting provides the information needed to plan and control operations
D D D D D D D D D D D
and therefore serves the information needs of internal parties such as managers and staff.
D D D D D D D D D D D D D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
7) Which of the following is a focus of managerial accounting?
D D D D D D D D D
A) to generate a company's financial statements for tax reporting
D D D D D D D D
B) to provide information to business managers to assist them in controlling their businesses
D D D D D D D D D D D D
C) to provide information to shareholders to assist them with their investment decisions
D D D D D D D D D D D
D) to ensure that the reports produced for internal and external business purposes are GAAP
D D D D D D D D D D D D D
Dcompliant Answer: B D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
8) Which of the following statements is true of managerial accounting?
D D D D D D D D D
A) The external stakeholders of a company are the primary users of managerial accounting.
D D D D D D D D D D D D
B) Managerial accounting information is used to help managers plan, direct and control their operations.
D D D D D D D D D D D D D
C) An external audit by an independent CPA is required for managerial accounting information.
D D D D D D D D D D D D
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
D D D D D D D D D
Answer: B
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
, PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
9) Managerial accounting information for a company is primarily used by
D D D D D D D D D .
A) its customers to understand the pricing of the product
D D D D D D D D
B) its creditors to understand the credibility of the business
D D D D D D D D
C) its employees to plan, direct and control operations
D D D D D D D
D) its investors to make their investment
D D D D D
Ddecisions Answer: C D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
10) Which of the following statements is true of financial accounting?
D D D D D D D D D
A) It provides information to investors needed for their investment decisions.
D D D D D D D D D
B) It provides future focused information needed for managing and delegating operations.
D D D D D D D D D D
C) It focuses on detailed reports for parts of the company rather than the whole company.
D D D D D D D D D D D D D D
D) It focuses on planning, directing and controlling day-to-day
D D D D D D D
Doperations. Answer: A D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
11) Which of the following is the primary focus of managerial accounting?
D D D D D D D D D D
A) providing information that managers need to make operational decisions
D D D D D D D D
B) providing historical data to investors and creditors
D D D D D D
C) providing summarized results of operations
D D D D
D) providing information to comply with laws and regulations of government
D D D D D D D D D
Dbodies Answer: A
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
AICPA DFunctional: D Reporting
D
PE DQuestion DType: D Concept
H2: D Why DIs DManagerial DAccounting DImportant? D(H1)
12) Which of the following is the primary focus of financial accounting?
D D D D D D D D D D
A) providing information that managers need to make operational decisions
D D D D D D D D
B) providing summarized information on operational results to investors and creditors
D D D D D D D D D
C) providing information to managers to assist in planning, directing and controlling operations
D D D D D D D D D D D
D) providing highly detailed information on product lines, regions, and divisions
D D D D D D D D D
Answer: B
D D
Diff: D1
LO: D M:1-1
AACSB: D Application Dof Dknowledge
