TEST BANK Financial and Managerial Accounting: Managerial Chapters, 7 th Edition (Miller-Nobles) Chapter 1-11

TEST BANK v7




Financial and Managerial Accounting:
v7 v7 v7




Managerial Chapters, 7th Edition
v7 v7 v7




(Miller-Nobles) Chapter 1-11
v7 v7

,Chapter M:1 Introduction to Managerial Accounting
v7 v7 v7 v7




Learning Objective M:1-1
v7 v7




1) Managerial accounting focuses on providing information for internal planning and
v7 v7 v7 v7 v7 v7 v7 v7 v7


control.Answer: TRUE
v7 7
v v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting

PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
v7 v7 v7 v7 v7 v7 v7 v7 v7


providesinformation to external stakeholders.
v7 7
v v7 v7 v7


Answer: FALSE
v 7


Explanation: The reverse is true. Financial accounting serves external stakeholder information
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


needswhile managerial accounting serves the needs of managers and internal staff.
v7 7
v v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting

PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

3) Financial statements prepared for investors and creditors often include forward-looking
v7 v7 v7 v7 v7 v7 v7 v7 v7


informationbecause they make decisions based on a company's future prospects.
v7 7
v v7 v7 v7 v7 v7 v7 v7 v7 v7


Answer: FALSE
v 7


Explanation: Financial statements provide mostly historical information; relevant and
v7 v7 v7 v7 v7 v7 v7 v7


faithfullyrepresentative information and focused on the past.
v7 7
v v7 v7 v7 v7 v7 v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting


PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

4) Managerial accounting reporting by a public firm is required to follow the rules of
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


GAAP.Answer: FALSE
v7 7
v v7


Explanation: Managerial accounting information is not guided by GAAP but rather by the concept
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


ofusefulness to management for decision making purposes.
v7 7
v v7 v7 v7 v7 v7 v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting


PE v7Question v7Type: v 7 Concept

,H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)




5) Financial reporting is typically much more detailed than managerial
v7 v7 v7 v7 v7 v7 v7 v7


accounting.Answer: FALSE
v7 7
v v7


Explanation: Financial reporting is typically less detailed than managerial accounting
v7 v7 v7 v7 v7 v7 v7 v7 v7


information. Financial accounting reporting is usually summary reports, prepared primarily on
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


the company as awhole, usually on a quarterly or annual basis.
v7 v7 v7 v7 7
v v7 v7 v7 v7 v7 v7 v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting


PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

6) Managerial accounting provides financial statements that report results of operations,
v7 v7 v7 v7 v7 v7 v7 v7 v7


financialposition, and cash flows both to managers and to external stockholders.
v7 7
v v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


Answer: FALSE v 7


Explanation: Managerial accounting provides the information needed to plan and control operations
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


andtherefore serves the information needs of internal parties such as managers and staff.
v7 7
v v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting

PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

7) Which of the following is a focus of managerial accounting?
v7 v7 v7 v7 v7 v7 v7 v7 v7


A) to generate a company's financial statements for tax reporting
v7 v7 v7 v7 v7 v7 v7 v7


B) to provide information to business managers to assist them in controlling their businesses
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


C) to provide information to shareholders to assist them with their investment decisions
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


D) to ensure that the reports produced for internal and external business purposes are GAAP
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


compliantAnswer: B
v7 7
v v7


Diff: v71
LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting


PE v7Question v7Type: v 7 Concept
H2: v 7 Why v7Is v7Managerial v7Accounting v7Important? v7(H1)

8) Which of the following statements is true of managerial accounting?
v7 v7 v7 v7 v7 v7 v7 v7 v7


A) The external stakeholders of a company are the primary users of managerial accounting.
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


B) Managerial accounting information is used to help managers plan, direct and control their
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


operations.
v7


C) An external audit by an independent CPA is required for managerial accounting information.
v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7 v7


D) Managerial accounting information must comply with Generally Accepted Accounting
v7 v7 v7 v7 v7 v7 v7 v7


Principles.Answer: B
v7 7
v v7


Diff: v71

, LO: v 7 M:1-1
AACSB: v 7 Application v7of
v7knowledgev7 AICPA v7Functional:
v 7 Reporting