MODULE 1 7. Which of the following statements is true when comparing manage
BASIC CONCEPTS IN MANAGEMENT ACCOUNTING accounting?
A. Managerial accounting places more emphasis on precision th
1. The major functions of management is (are): B. Both are highly dependent on timely information.
A. strategic management and long-range planning. C. Both rely on the same accounting information system.
B. planning and decision making. D. Managerial accounting is concerned with external decision m
C. identifying threats and opportunities for the firm.
D. all of the above. Bobadilla 8. Which of the following is true of managerial accounting rather than
A. The outputs of this accounting system are the primary financia
2. The process of identifying, measuring, analyzing, interpreting, and communicating information B. The methods of this accounting system are established by an o
in pursuit of an organization's goals is called C. The accounting methods are standardized to allow comparison
A. managerial accounting C. management D. The accounting system would be unique to each company.
B. financial accounting D. promotional activities Bobadilla
9. Management accounting’s role in the control processes is to provi
3. The primary objective of management accounting is A. managers with information that can be used to determine cus
A. to provide stockholders and potential investors with useful information for decision B. investors and creditors information on the financial stability of
making. C. managers with relevant information to compare with expectat
B. to provide banks and other creditors with information useful in making credit decisions. D. input to managers on the best ways to achieve contin
C. to provide management with information useful for planning and control of operations. production process.
D. to provide supervising government agencies with information about the company’s
management affairs. Bobadilla 10. Which of the following statements are true regarding financial and m
I. Both are mandatory.
4. Management accounting information II. Both rely on the same underlying financial data.
A. uses historical cost as the basis for reports to managers who are making decisions III. Both emphasize the segments of an organization, rather
about future courses of action. organization as a whole.
B. should be developed and provided only if its benefits exceed its costs. IV. Both are geared to the future, rather than to the past.
C. does not reflect the financial criteria of verifiability or consistency. A. I, II, III, and IV C. Only II and III
D. should serve the basic needs of investors and creditors. Bobadilla B. Only II, III and IV D. Only II
5. Which of the following is included in the day-to-day work of the management team? 11. Managerial accounting activity adds value to an organization by pu
A. decision making C. controlling which include
B. planning D. all of the above Bobadilla A. providing information for decision making and planning.
B. measuring the performance of activities within an organization.
6. Paying rent, purchasing supplies, and purchasing inventory are which of the day-to-day work C. assisting managers in directing and controlling operational acti
activities of the management team? D. all of them
A. decision making C. directing operational activities
B. planning D. only A and B Bobadilla 12. Managerial accounting places considerable weight on:
A. generally accepted accounting principles.
1
, B. the financial history of the entity. C. CPAs who are performing management advisory services m
C. ensuring that all transactions are properly recorded. the practice of management consulting.
D. detailed segment reports about departments, products, and customers. Bobadilla D. Included in the practice of consulting is the provision of confi
identity of the client is concealed.
13. Which of the following statement is FALSE?
A. Managerial accounting need not conform to GAAP. 18. The primary purpose of management advisory services is
B. Financial accounting reports focus on subunits of the organization. A. To conduct special studies, preparation of recommendations,
C. Managerial accounting is not required programs, and provision of advice and assistance in their imp
D. Managerial accounting focuses on the needs of internal users. Bobadilla B. To provide services or to fulfill some social needs.
C. To improve the client’s use of its capabilities and resources t
14. For internal uses, managers are more concerned with receiving information that is: the organization.
A. completely objective and verifiable. D. To earn the best rate of return on resources entrusted
B. completely accurate and precise. investment being taken into account and consistent wit
C. relevant, flexible, and immediately available. responsibilities.
D. relevant, completely accurate, and precise. Bobadilla
19. Managerial accounting information:
15. Which of the following statements is correct? A. pertains to the entity as a whole and is highly aggregated.
A. A certified public accountant can readily render management advisory services to the B. pertains to subunits of the entity and may be very detailed.
public. C. is prepared only once a year.
B. A CPA with MBA and DBM degrees is automatically qualified to render management D. is constrained by the requirements of generally accepted accou
advisory services.
C. Competence as a standard in the rendition of management advisory services by a CPA 20. Managerial accounting is primarily concerned with:
may be equated to having excellent scholarly preparation to include the usual A. segments of a company rather than the company as a whole.
baccalaureate degree, an MBA and other post graduate studies. B. the data needs of stockholders and creditors.
D. Adequate training and experience in both the analytical approach and process in a C. meeting the requirements of generally accepted accounting pri
particular undertaking are requisites for the CPA to be involved in a management D. the company as a whole rather than a segment of the organiza
advisory service engagement. (RPCPA)
21. The major reporting standard for presenting managerial accounting
16. The following characterize management advisory services except A. relevance
A. It involves decision for the future B. generally accepted accounting principles
B. It broader in scope and varied in nature C. the cost principle
C. It utilizes more junior staff than senior members of the firm D. the current tax law
D. It relates to specific problems where expert help is required Bobadilla
22. With respect to the time dimension, how does manag
17. Which of the following statements is incorrect? with external performance evaluation?
A. CPAs provide management advisory services to go around the ethical constraints as Bobadilla A. B.
mandated by the Accountancy Law. Managerial Decision Making Past Past F
B. Businesses hire management consultants to help define specific problems and develop External Performance Past Future
solutions.
2
BASIC CONCEPTS IN MANAGEMENT ACCOUNTING accounting?
A. Managerial accounting places more emphasis on precision th
1. The major functions of management is (are): B. Both are highly dependent on timely information.
A. strategic management and long-range planning. C. Both rely on the same accounting information system.
B. planning and decision making. D. Managerial accounting is concerned with external decision m
C. identifying threats and opportunities for the firm.
D. all of the above. Bobadilla 8. Which of the following is true of managerial accounting rather than
A. The outputs of this accounting system are the primary financia
2. The process of identifying, measuring, analyzing, interpreting, and communicating information B. The methods of this accounting system are established by an o
in pursuit of an organization's goals is called C. The accounting methods are standardized to allow comparison
A. managerial accounting C. management D. The accounting system would be unique to each company.
B. financial accounting D. promotional activities Bobadilla
9. Management accounting’s role in the control processes is to provi
3. The primary objective of management accounting is A. managers with information that can be used to determine cus
A. to provide stockholders and potential investors with useful information for decision B. investors and creditors information on the financial stability of
making. C. managers with relevant information to compare with expectat
B. to provide banks and other creditors with information useful in making credit decisions. D. input to managers on the best ways to achieve contin
C. to provide management with information useful for planning and control of operations. production process.
D. to provide supervising government agencies with information about the company’s
management affairs. Bobadilla 10. Which of the following statements are true regarding financial and m
I. Both are mandatory.
4. Management accounting information II. Both rely on the same underlying financial data.
A. uses historical cost as the basis for reports to managers who are making decisions III. Both emphasize the segments of an organization, rather
about future courses of action. organization as a whole.
B. should be developed and provided only if its benefits exceed its costs. IV. Both are geared to the future, rather than to the past.
C. does not reflect the financial criteria of verifiability or consistency. A. I, II, III, and IV C. Only II and III
D. should serve the basic needs of investors and creditors. Bobadilla B. Only II, III and IV D. Only II
5. Which of the following is included in the day-to-day work of the management team? 11. Managerial accounting activity adds value to an organization by pu
A. decision making C. controlling which include
B. planning D. all of the above Bobadilla A. providing information for decision making and planning.
B. measuring the performance of activities within an organization.
6. Paying rent, purchasing supplies, and purchasing inventory are which of the day-to-day work C. assisting managers in directing and controlling operational acti
activities of the management team? D. all of them
A. decision making C. directing operational activities
B. planning D. only A and B Bobadilla 12. Managerial accounting places considerable weight on:
A. generally accepted accounting principles.
1
, B. the financial history of the entity. C. CPAs who are performing management advisory services m
C. ensuring that all transactions are properly recorded. the practice of management consulting.
D. detailed segment reports about departments, products, and customers. Bobadilla D. Included in the practice of consulting is the provision of confi
identity of the client is concealed.
13. Which of the following statement is FALSE?
A. Managerial accounting need not conform to GAAP. 18. The primary purpose of management advisory services is
B. Financial accounting reports focus on subunits of the organization. A. To conduct special studies, preparation of recommendations,
C. Managerial accounting is not required programs, and provision of advice and assistance in their imp
D. Managerial accounting focuses on the needs of internal users. Bobadilla B. To provide services or to fulfill some social needs.
C. To improve the client’s use of its capabilities and resources t
14. For internal uses, managers are more concerned with receiving information that is: the organization.
A. completely objective and verifiable. D. To earn the best rate of return on resources entrusted
B. completely accurate and precise. investment being taken into account and consistent wit
C. relevant, flexible, and immediately available. responsibilities.
D. relevant, completely accurate, and precise. Bobadilla
19. Managerial accounting information:
15. Which of the following statements is correct? A. pertains to the entity as a whole and is highly aggregated.
A. A certified public accountant can readily render management advisory services to the B. pertains to subunits of the entity and may be very detailed.
public. C. is prepared only once a year.
B. A CPA with MBA and DBM degrees is automatically qualified to render management D. is constrained by the requirements of generally accepted accou
advisory services.
C. Competence as a standard in the rendition of management advisory services by a CPA 20. Managerial accounting is primarily concerned with:
may be equated to having excellent scholarly preparation to include the usual A. segments of a company rather than the company as a whole.
baccalaureate degree, an MBA and other post graduate studies. B. the data needs of stockholders and creditors.
D. Adequate training and experience in both the analytical approach and process in a C. meeting the requirements of generally accepted accounting pri
particular undertaking are requisites for the CPA to be involved in a management D. the company as a whole rather than a segment of the organiza
advisory service engagement. (RPCPA)
21. The major reporting standard for presenting managerial accounting
16. The following characterize management advisory services except A. relevance
A. It involves decision for the future B. generally accepted accounting principles
B. It broader in scope and varied in nature C. the cost principle
C. It utilizes more junior staff than senior members of the firm D. the current tax law
D. It relates to specific problems where expert help is required Bobadilla
22. With respect to the time dimension, how does manag
17. Which of the following statements is incorrect? with external performance evaluation?
A. CPAs provide management advisory services to go around the ethical constraints as Bobadilla A. B.
mandated by the Accountancy Law. Managerial Decision Making Past Past F
B. Businesses hire management consultants to help define specific problems and develop External Performance Past Future
solutions.
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