TEST BANK
N
Financial and Managerial Accounting:
N N N
Managerial Chapters, 7th Edition
N N
N
(Miller-Nobles) Chapter 1-11
N N
,Chapter M:1 N Introduction to Managerial Accounting N N N
Learning Objective M:1-1 N N
1) Managerial accounting focuses on providing information for internal planning and
N N N N N N N N N
control. Answer: TRUE
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
N N N N N N N N N
provides information to external stakeholders.
N N N N N
Answer: FALSE NN
Explanation: The reverse is true. Financial accounting serves external stakeholder information
N N N N N N N N N N
needswhile managerial accounting serves the needs of managers and internal staff.
N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
3) Financial statements prepared for investors and creditors often include forward-looking
N N N N N N N N N
information because they make decisions based on a company's future prospects.
N N N N N N N N N N N
Answer: FALSE NN
Explanation: Financial statements provide mostly historical information; relevant and
N N N N N N N N
faithfully representative information and focused on the past.
N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
4) Managerial accounting reporting by a public firm is required to follow the rules of
N N N N N N N N N N N N N
GAAP. Answer: FALSE
N NN N
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept
N N N N N N N N N N N N N
of usefulness to management for decision making purposes.
N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
,H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
5) Financial reporting is typically much more detailed than managerial
N N N N N N N N
accounting. Answer: FALSE
N NN N
Explanation: Financial reporting is typically less detailed than managerial accounting
N N N N N N N N N
Ninformation. Financial accounting reporting is usually summary reports, prepared primarily
N N N N N N N N N
on the company as a whole, usually on a quarterly or annual basis.
N N N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
6) Managerial accounting provides financial statements that report results of operations,
N N N N N N N N N
financial position, and cash flows both to managers and to external stockholders.
N N N N N N N N N N N N
Answer: FALSE NN
Explanation: Managerial accounting provides the information needed to plan and control operations
N N N N N N N N N N N
and therefore serves the information needs of internal parties such as managers and staff.
N N N N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
7) Which of the following is a focus of managerial accounting?
N N N N N N N N N
A) to generate a company's financial statements for tax reporting
N N N N N N N N
B) to provide information to business managers to assist them in controlling their businesses
N N N N N N N N N N N N
C) to provide information to shareholders to assist them with their investment decisions
N N N N N N N N N N N
D) to ensure that the reports produced for internal and external business purposes are GAAP
N N N N N N N N N N N N N
compliant Answer: B
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
8) Which of the following statements is true of managerial accounting?
N N N N N N N N N
A) The external stakeholders of a company are the primary users of managerial accounting.
N N N N N N N N N N N N
B) Managerial accounting information is used to help managers plan, direct and control their operations.
N N N N N N N N N N N N N
C) An external audit by an independent CPA is required for managerial accounting information.
N N N N N N N N N N N N
D) Managerial accounting information must comply with Generally Accepted Accounting
N N N N N N N N
Principles. Answer: B
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
, knowledge AICPA Functional:
N N N
Reporting
N
N
Financial and Managerial Accounting:
N N N
Managerial Chapters, 7th Edition
N N
N
(Miller-Nobles) Chapter 1-11
N N
,Chapter M:1 N Introduction to Managerial Accounting N N N
Learning Objective M:1-1 N N
1) Managerial accounting focuses on providing information for internal planning and
N N N N N N N N N
control. Answer: TRUE
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
N N N N N N N N N
provides information to external stakeholders.
N N N N N
Answer: FALSE NN
Explanation: The reverse is true. Financial accounting serves external stakeholder information
N N N N N N N N N N
needswhile managerial accounting serves the needs of managers and internal staff.
N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
3) Financial statements prepared for investors and creditors often include forward-looking
N N N N N N N N N
information because they make decisions based on a company's future prospects.
N N N N N N N N N N N
Answer: FALSE NN
Explanation: Financial statements provide mostly historical information; relevant and
N N N N N N N N
faithfully representative information and focused on the past.
N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
4) Managerial accounting reporting by a public firm is required to follow the rules of
N N N N N N N N N N N N N
GAAP. Answer: FALSE
N NN N
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept
N N N N N N N N N N N N N
of usefulness to management for decision making purposes.
N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
,H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
5) Financial reporting is typically much more detailed than managerial
N N N N N N N N
accounting. Answer: FALSE
N NN N
Explanation: Financial reporting is typically less detailed than managerial accounting
N N N N N N N N N
Ninformation. Financial accounting reporting is usually summary reports, prepared primarily
N N N N N N N N N
on the company as a whole, usually on a quarterly or annual basis.
N N N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
6) Managerial accounting provides financial statements that report results of operations,
N N N N N N N N N
financial position, and cash flows both to managers and to external stockholders.
N N N N N N N N N N N N
Answer: FALSE NN
Explanation: Managerial accounting provides the information needed to plan and control operations
N N N N N N N N N N N
and therefore serves the information needs of internal parties such as managers and staff.
N N N N N N N N N N N N N N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
7) Which of the following is a focus of managerial accounting?
N N N N N N N N N
A) to generate a company's financial statements for tax reporting
N N N N N N N N
B) to provide information to business managers to assist them in controlling their businesses
N N N N N N N N N N N N
C) to provide information to shareholders to assist them with their investment decisions
N N N N N N N N N N N
D) to ensure that the reports produced for internal and external business purposes are GAAP
N N N N N N N N N N N N N
compliant Answer: B
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
knowledge AICPA Functional:
N N N
Reporting
N
PE Question Type: Concept
N N N N
H2: Why Is Managerial Accounting Important? (H1)
NN N N N N N
8) Which of the following statements is true of managerial accounting?
N N N N N N N N N
A) The external stakeholders of a company are the primary users of managerial accounting.
N N N N N N N N N N N N
B) Managerial accounting information is used to help managers plan, direct and control their operations.
N N N N N N N N N N N N N
C) An external audit by an independent CPA is required for managerial accounting information.
N N N N N N N N N N N N
D) Managerial accounting information must comply with Generally Accepted Accounting
N N N N N N N N
Principles. Answer: B
N NN N
Diff: 1 N
LO: M:1-1 N N
AACSB: Application of N N
, knowledge AICPA Functional:
N N N
Reporting
N
