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

,Chapter M:1 v IntroductiontoManagerial Accounting v v v




LearningObjectiveM:1-1 v v




1) Managerialaccountingfocusesonprovidinginformationforinternalplanningandcontrol.
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Answer: TRUE
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationofknowledge
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AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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2) Financialaccountingpreparesreportsforinternalpurposes,whereasmanagerialaccounting
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provides informationtoexternalstakeholders.
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Answer: FALSE v v




Explanation:Thereverseistrue.Financialaccountingservesexternalstakeholder information
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needswhile managerialaccountingservestheneedsofmanagersandinternalstaff.
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationofknowledge
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AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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3) Financialstatementspreparedforinvestorsandcreditorsoftenincludeforward-lookinginformation
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vbecausetheymakedecisionsbasedonacompany'sfutureprospects.
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Answer: FALSE v v




Explanation:Financialstatementsprovidemostlyhistoricalinformation; relevantand
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faithfully representativeinformationandfocusedonthepast.
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationofknowledge
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AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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4) ManagerialaccountingreportingbyapublicfirmisrequiredtofollowtherulesofGAAP. v v v v v v v v v v v v v v v




Answer: FALSE
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Explanation:ManagerialaccountinginformationisnotguidedbyGAAPbutratherbytheconceptof
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vusefulnesstomanagementfordecisionmakingpurposes. v v v v v v




Diff: 1 v




LO: M:1-1
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AACSB: Applicationofknowledge
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AICPAFunctional: Reporting
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PEQuestionType: Concept
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,H2: WhyIsManagerialAccounting Important? (H1)
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5) Financialreportingistypicallymuchmoredetailedthanmanagerial v v v v v v v v




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




information. Financial accounting reporting is usually summary reports, prepared primarily on
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the company as a whole,usuallyonaquarterlyorannual basis.
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Diff: 1 v




LO: M:1-1 v v




AACSB: Applicationofknowledge v v v




AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important?(H1)
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6) Managerialaccountingprovidesfinancialstatementsthatreportresultsofoperations, v v v v v v v v v




financial position,andcashflowsbothtomanagersandtoexternalstockholders.
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Answer: FALSE v v




Explanation: Managerialaccountingprovidestheinformationneededtoplanandcontroloperationsand v v v v v v v v v v v v




vthereforeservestheinformationneedsofinternalpartiessuchasmanagersandstaff.v v v v v v v v v v v v




Diff: 1 v




LO: M:1-1 v v




AACSB: Applicationofknowledge v v v




AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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7) Whichofthefollowingisafocusofmanagerialaccounting? v v v v v v v v v




A) togenerateacompany'sfinancialstatementsfortaxreporting
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B) toprovideinformationtobusinessmanagerstoassistthemincontrollingtheirbusinesses
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C) toprovideinformationtoshareholderstoassistthemwiththeirinvestmentdecisions
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D) toensurethatthereportsproducedforinternalandexternalbusinesspurposesareGAAPcompliant
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Answer: B
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Diff: 1 v




LO: M:1-1 v v




AACSB: Applicationofknowledge v v v




AICPAFunctional: Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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8) Whichofthefollowingstatementsistrueofmanagerialaccounting?
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A) Theexternalstakeholdersofacompanyaretheprimaryusersofmanagerialaccounting.
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B) Managerialaccountinginformationisusedtohelpmanagersplan,directandcontroltheiroperations. v v v v v v v v v v v v v




C) AnexternalauditbyanindependentCPAisrequiredformanagerialaccountinginformation.
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D) ManagerialaccountinginformationmustcomplywithGenerallyAcceptedAccounting v v v v v v v v




Principles. Answer: B
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Diff: 1 v




LO: M:1-1 v v




AACSB: Applicationofknowledge v v v




AICPAFunctional: Reporting
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, PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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9) Managerialaccountinginformationforacompanyisprimarilyusedby v v v v v v v v v .
A) itscustomerstounderstandthepricingoftheproduct
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B) itscreditorstounderstandthecredibilityofthebusiness
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C) itsemployeestoplan,directandcontroloperations
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D) itsinvestorstomaketheirinvestmentdecisions
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Answer: C
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationof v v




knowledge AICPAFunctional:
v v v




Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important? (H1)
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10) Whichofthefollowingstatementsistrueoffinancialaccounting?
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A) Itprovidesinformationtoinvestorsneededfortheirinvestmentdecisions.
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B) Itprovidesfuturefocusedinformationneededformanaginganddelegatingoperations.
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C) Itfocusesondetailedreportsforpartsofthecompanyratherthanthewholecompany.
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D) Itfocusesonplanning,directingandcontrollingday-to-dayoperations.
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Answer: A
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationof v v




knowledge AICPAFunctional:
v v v




Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccounting Important?(H1)
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11) Whichofthefollowingistheprimaryfocusofmanagerialaccounting?
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A) providinginformationthatmanagersneedtomakeoperationaldecisions v v v v v v v v




B) providinghistoricaldatatoinvestorsandcreditors v v v v v v




C) providingsummarizedresultsofoperations v v v v




D) providinginformationtocomplywithlawsandregulationsofgovernmentbodies v v v v v v v v v v v




Answer: A
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Diff: 1 v




LO: M:1-1
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AACSB: Applicationof v v




knowledge AICPAFunctional:
v v v




Reporting
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PEQuestionType: Concept
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H2: WhyIsManagerialAccountingImportant?(H1)
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12) Whichofthefollowingistheprimaryfocusoffinancialaccounting?
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A) providinginformationthatmanagersneedtomakeoperationaldecisions v v v v v v v v




B) providingsummarizedinformationonoperationalresultstoinvestorsandcreditors
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C) providinginformationtomanagerstoassistinplanning,directingandcontrollingoperations
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D) providinghighlydetailedinformationonproductlines,regions,anddivisions v v v v v v v v v v




Answer: B
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Diff: 1 v




LO: M:1-1
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