TEST BANK FOR Horngren's Financial and Managerial Accounting, The Managerial Chapters Eighth Edition Tracie Miller-Nobles Brenda Mattison

TEST BANK FOR
Horngren's Financial and
Managerial Accounting, The
Managerial Chapters
Eighth Edition




Tracie Miller-Nobles
Brenda Mattison

,Financial and Managerial Accounting: Managerial Chapters, 8e (Miller-Nobles)
Chapter M:1 Introduction to Managerial Accounting

Learning Objective M:1-1


1) Managerial accounting focuses on providing information for internal planning and control. Answer:
TRUE

Diff: 1


LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)

2) Financial accounting prepares reports for internal purposes, whereas managerial accounting
provides information to external stakeholders.

Answer: FALSE
Explanation: The reverse is true. Financial accounting serves external stakeholder information
needs while managerial accounting serves the needs of managers and internal staff.
Diff: 1


LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)

3) Financial statements prepared for investors and creditors often include forward-looking
information because they make decisions based on a company's future prospects.

Answer: FALSE
Explanation: Financial statements provide mostly historical information; relevant and faithfully
representative information and focused on the past.
Diff: 1


LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)

,4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP. Answer:
FALSE

Explanation: Managerial accounting information is not guided by GAAP but rather by the
concept of usefulness to management for decision making purposes.
Diff: 1


LO: M:1-1
AACSB: Application of knowledge

, AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)
5) Financial reporting is typically much more detailed than managerial accounting.
Answer: FALSE

Explanation: Financial reporting is typically less detailed than managerial accounting
information. Financial accounting reporting is usually summary reports, prepared primarily on
the company as a whole, usually on a quarterly or annual basis.
Diff: 1

LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)

6) Managerial accounting provides financial statements that report results of operations, financial
position, and cash flows both to managers and to external stockholders.

Answer: FALSE
Explanation: Managerial accounting provides the information needed to plan and control
operations and therefore serves the information needs of internal parties such as managers and
staff.
Diff: 1


LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)

7) Which of the following is a focus of managerial accounting?
A) to generate a company's financial statements for tax reporting
B) to provide information to business managers to assist them in controlling their businesses
C) to provide information to shareholders to assist them with their investment decisions
D) to ensure that the reports produced for internal and external business purposes are GAAP
compliant

Answer: B
Diff: 1


LO: M:1-1
AACSB: Application of knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2: Why Is Managerial Accounting Important? (H1)