TEST BANK
D
Financial and Managerial Accounting:
D D D
Managerial Chapters, 7th Edition
D D D
(Miller-Nobles) Chapter 1-11
D D
,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 control.
D D D D D D D D D D
Answer: TRUE
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides
D D D D D D D D D D
information to external stakeholders.
D D D D
Answer: FALSE D
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
D D D D D D D D D D D D
Dmanagerial accounting serves the needs of managers and internal staff.
D D D D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
3) Financial statements prepared for investors and creditors often include forward-looking information
D D D D D D D D D D
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 faithfullyrepresentative
D D D D D D D D D D
information and focused on the past.
D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.
D D D D D D D D D D D D D D
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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
,H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
5) Financial reporting is typically much more detailed than managerial accounting.
D D D D D D D D D
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
Financial accounting reporting is usually summary reports, prepared primarily on the company as a
D D D D D D D D D D D D D D
whole, usually on a quarterly or annual basis.
D D D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
6) Managerial accounting provides financial statements that report results of operations, financial
D D D D D D D D D D
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 and
D D D D D D D D D D D D
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
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 compliant
D D D D D D D D D D D D D D
Answer: B
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
, PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 decisions
D D D D D D
Answer: C
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 operations.
D D D D D D D D
Answer: A
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 bodies
D D D D D D D D D D
Answer: A
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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
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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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge D D D
D
Financial and Managerial Accounting:
D D D
Managerial Chapters, 7th Edition
D D D
(Miller-Nobles) Chapter 1-11
D D
,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 control.
D D D D D D D D D D
Answer: TRUE
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides
D D D D D D D D D D
information to external stakeholders.
D D D D
Answer: FALSE D
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
D D D D D D D D D D D D
Dmanagerial accounting serves the needs of managers and internal staff.
D D D D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
3) Financial statements prepared for investors and creditors often include forward-looking information
D D D D D D D D D D
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 faithfullyrepresentative
D D D D D D D D D D
information and focused on the past.
D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.
D D D D D D D D D D D D D D
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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
,H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
5) Financial reporting is typically much more detailed than managerial accounting.
D D D D D D D D D
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
Financial accounting reporting is usually summary reports, prepared primarily on the company as a
D D D D D D D D D D D D D D
whole, usually on a quarterly or annual basis.
D D D D D D D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
6) Managerial accounting provides financial statements that report results of operations, financial
D D D D D D D D D D
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 and
D D D D D D D D D D D D
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
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 compliant
D D D D D D D D D D D D D D
Answer: B
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
, PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 decisions
D D D D D D
Answer: C
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 operations.
D D D D D D D D
Answer: A
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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 bodies
D D D D D D D D D D
Answer: A
D D
Diff: 1 D
LO: M:1-1
D
AACSB: Application of knowledge
D D D
AICPA Functional: Reporting
D D D
PE Question Type: Concept
D D D
H2: Why Is Managerial Accounting Important? (H1)
D D D D D D
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: 1 D
LO: M:1-1
D
AACSB: Application of knowledge D D D
