Principles of Accounting - D074 Unit:6
Exam UPDATED QUESTIONS AND
CORRECT ANSWERS
Return on investment - CORRECT ANSWER net profit after taxes divided by total assets
Management Accounting: - CORRECT ANSWER Unique competitive tool
Both financial and nonfinancial data
Usually kept secret from competitors
Used for internal planning, control, and evaluation
Financial Accounting: - CORRECT ANSWER Uniform across companies (generally accepted
accounting principles)
Restricted to financial data
Data often made public
Used primarily by investors and creditors in deciding whether to provide capital to the company
Which statement about managerial accounting data is true? - CORRECT ANSWER Managerial
accounting data are created based on competitive needs that are unique to the organization.
Which characteristic is a unique feature of management accounting information? - CORRECT
ANSWER Management accounting information is composed of both financial and nonfinancial
data.
Which group represents the primary users of managerial accounting information? - CORRECT
ANSWER Managers
Cost accountant - CORRECT ANSWER specially trained to prepare and analyze accounting
information for internal decision-making.
The three functions of management are... - CORRECT ANSWER planning, controlling, and
evaluating
, Management planning - CORRECT ANSWER involves a process of recognizing problems or
opportunities, identifying alternatives, analyzing alternatives, then choosing and implementing the
best alternative(s) (long term and short term)
Long-run planning - CORRECT ANSWER strategic planning, and
Capital budgeting.
Short-run planning - CORRECT ANSWER production and process prioritizing, and
Operational budgeting (profit planning).
Capital budgeting - CORRECT ANSWER the process of planning and managing a firm's long-
term investments
Production prioritizing - CORRECT ANSWER Management's continual evaluation of various
product lines and divisions' profitability in order to analyze and identify opportunities to improve
profits.
Operational budgeting - CORRECT ANSWER Sometimes known as profit plans, are used by
managers to establish and communicate daily, weekly, and monthly goals (also known as standards)
for the organization.
Controlling - CORRECT ANSWER involves the process of tracking actual performance
Variances - CORRECT ANSWER Deviations from standards
Evaluating - CORRECT ANSWER involves analyzing results, providing feedback to managers
and other employees, rewarding performance, and identifying problems
Company managers are important users of managerial accounting information. What are the three
primary functions of company managers? - CORRECT ANSWER Planning, controlling, and
evaluating
Exam UPDATED QUESTIONS AND
CORRECT ANSWERS
Return on investment - CORRECT ANSWER net profit after taxes divided by total assets
Management Accounting: - CORRECT ANSWER Unique competitive tool
Both financial and nonfinancial data
Usually kept secret from competitors
Used for internal planning, control, and evaluation
Financial Accounting: - CORRECT ANSWER Uniform across companies (generally accepted
accounting principles)
Restricted to financial data
Data often made public
Used primarily by investors and creditors in deciding whether to provide capital to the company
Which statement about managerial accounting data is true? - CORRECT ANSWER Managerial
accounting data are created based on competitive needs that are unique to the organization.
Which characteristic is a unique feature of management accounting information? - CORRECT
ANSWER Management accounting information is composed of both financial and nonfinancial
data.
Which group represents the primary users of managerial accounting information? - CORRECT
ANSWER Managers
Cost accountant - CORRECT ANSWER specially trained to prepare and analyze accounting
information for internal decision-making.
The three functions of management are... - CORRECT ANSWER planning, controlling, and
evaluating
, Management planning - CORRECT ANSWER involves a process of recognizing problems or
opportunities, identifying alternatives, analyzing alternatives, then choosing and implementing the
best alternative(s) (long term and short term)
Long-run planning - CORRECT ANSWER strategic planning, and
Capital budgeting.
Short-run planning - CORRECT ANSWER production and process prioritizing, and
Operational budgeting (profit planning).
Capital budgeting - CORRECT ANSWER the process of planning and managing a firm's long-
term investments
Production prioritizing - CORRECT ANSWER Management's continual evaluation of various
product lines and divisions' profitability in order to analyze and identify opportunities to improve
profits.
Operational budgeting - CORRECT ANSWER Sometimes known as profit plans, are used by
managers to establish and communicate daily, weekly, and monthly goals (also known as standards)
for the organization.
Controlling - CORRECT ANSWER involves the process of tracking actual performance
Variances - CORRECT ANSWER Deviations from standards
Evaluating - CORRECT ANSWER involves analyzing results, providing feedback to managers
and other employees, rewarding performance, and identifying problems
Company managers are important users of managerial accounting information. What are the three
primary functions of company managers? - CORRECT ANSWER Planning, controlling, and
evaluating
