Management Accounting for Decision
Makers Solution Manual Complete Chapter
Solutions
The emphasis in financial accounting is on which of the following external user groups?
- answers Investors and creditors
The primary internal group that uses accounting information is - answers Management
Internal reports are generally used by - answers Management
Which of the following is NOT an external user of financial information? - answers
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - answers It is a government agency
Generally accepted accounting principles are - answers Developed by accounting rule
makers
The initials GAAP stand for - answers Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector - answers
Financial Accounting Standards Board (FASB)
The initials CPA stand for - answers Certified Public Accountant
Standards established by the International Accounting Standards Board are referred to
as - answers International Financial Reporting Standards
Which of the following is NOT a service typically provided by large public accounting
firms?
Making management decisions
Performing audits
Redesigning operating procedures
Establishing accounting systems - answers Making management decisions
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - answers Internal
Revenue Service
,The organization that develops worldwide accounting standards is the - answers
International Accounting Standards Board (IASB)
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - answers the theoretical necessity of a common set of accounting
standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - answers True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance.
True/False - answers False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - answers Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and expenses
in the form of a lower interest rate on the loan because of reduced uncertainty for the
lender with regard to repayment.
True/False - answers True
Which of the following is NOT one of the three primary financial statements? - answers
The Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce
uncertainty for an investor regarding the firm's future financial performance.
True/False - answers True
Another name for the balance sheet is the - answers statement of financial position
Which of the following is true of the balance sheet? - answers It identifies a company's
assets and liabilities as of a specific date.
Markanich Company purchased land for $90,000 in 2010. In 2013, the land is valued at
$115,000. The land would appear on the company's books in 2013 at - answers
$90,000
Which of the following would be considered a long-term liability? - answers Mortgage
payable
,Which of the following distinguishes between current and long-term assets? - answers
Classified balance sheet
Which of the following is the reason that the accounting equation is true by definition? -
answers Liabilities and owner's equity are the sources that fund the purchase of assets
Which of the following accounts is considered to be the most liquid? - answers Cash
Which of the following financial statements provides a picture of the enterprise at a
particular point in time? - answers Balance Sheet
The idea that the activities of the entity are to be separated from those of the individual
owner is the - answers Separate entity concept
The idea that transactions are recorded at their exchange prices at the transaction date
is referred to as the - answers Cost principle
Which of the following types of accounts are NOT found on the balance sheet? -
answers Revenues
The idea that businesses must be accounted for as though they will exist at least for the
foreseeable future is the - answers Going concern concept
Expense and revenue accounts appear on the - answers Income statement
Another name for the income statement is - answers Statement of earnings
Revenues cause - answers An increase in net assets
Costs that are incurred during the normal operations of a business to generate
revenues are called - answers Expenses
The financial statement that presents a summary of the revenues and expenses of a
business for a specific period of time, such as a month or a year, is called a(n) -
answers Income Statement
Which of the following would be included on an income statement? - answers Rent
expense
Expenses generally cause - answers A decrease in net assets
Which of the following activities would NOT be classified as an investing activity? -
answers Purchase of inventory
Which of the following classifications refers to those activities whereby cash is obtained
or repaid to owners and creditors? - answers Financing
, During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - answers
$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
Which of the following classifications refers to those activities that are part of the day-to-
day business of a company? - answers Operating
Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - answers Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a
firm's - answers Notes to financial statements
Which of the following is NOT one of the four general types of financial statement
notes? - answers Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be
explained in the notes to the financial statements? - answers The method used to
estimate depreciation on a piece of equipment
Which of the following is an example of a disclosure of information NOT recognized that
would be explained in the notes to the financial statements? - answers The disclosure of
the uncertain, potential outcome of a lawsuit
Makers Solution Manual Complete Chapter
Solutions
The emphasis in financial accounting is on which of the following external user groups?
- answers Investors and creditors
The primary internal group that uses accounting information is - answers Management
Internal reports are generally used by - answers Management
Which of the following is NOT an external user of financial information? - answers
Management
Which of the following is NOT true of the Financial Accounting Standards Board
(FASB)? - answers It is a government agency
Generally accepted accounting principles are - answers Developed by accounting rule
makers
The initials GAAP stand for - answers Generally Accepted Accounting Principles
The current standard-setting board for accounting in the private sector - answers
Financial Accounting Standards Board (FASB)
The initials CPA stand for - answers Certified Public Accountant
Standards established by the International Accounting Standards Board are referred to
as - answers International Financial Reporting Standards
Which of the following is NOT a service typically provided by large public accounting
firms?
Making management decisions
Performing audits
Redesigning operating procedures
Establishing accounting systems - answers Making management decisions
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - answers Internal
Revenue Service
,The organization that develops worldwide accounting standards is the - answers
International Accounting Standards Board (IASB)
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - answers the theoretical necessity of a common set of accounting
standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - answers True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance.
True/False - answers False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress - - answers Sarbanes-Oxley Act
A borrower benefits from providing financial information regarding income and expenses
in the form of a lower interest rate on the loan because of reduced uncertainty for the
lender with regard to repayment.
True/False - answers True
Which of the following is NOT one of the three primary financial statements? - answers
The Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce
uncertainty for an investor regarding the firm's future financial performance.
True/False - answers True
Another name for the balance sheet is the - answers statement of financial position
Which of the following is true of the balance sheet? - answers It identifies a company's
assets and liabilities as of a specific date.
Markanich Company purchased land for $90,000 in 2010. In 2013, the land is valued at
$115,000. The land would appear on the company's books in 2013 at - answers
$90,000
Which of the following would be considered a long-term liability? - answers Mortgage
payable
,Which of the following distinguishes between current and long-term assets? - answers
Classified balance sheet
Which of the following is the reason that the accounting equation is true by definition? -
answers Liabilities and owner's equity are the sources that fund the purchase of assets
Which of the following accounts is considered to be the most liquid? - answers Cash
Which of the following financial statements provides a picture of the enterprise at a
particular point in time? - answers Balance Sheet
The idea that the activities of the entity are to be separated from those of the individual
owner is the - answers Separate entity concept
The idea that transactions are recorded at their exchange prices at the transaction date
is referred to as the - answers Cost principle
Which of the following types of accounts are NOT found on the balance sheet? -
answers Revenues
The idea that businesses must be accounted for as though they will exist at least for the
foreseeable future is the - answers Going concern concept
Expense and revenue accounts appear on the - answers Income statement
Another name for the income statement is - answers Statement of earnings
Revenues cause - answers An increase in net assets
Costs that are incurred during the normal operations of a business to generate
revenues are called - answers Expenses
The financial statement that presents a summary of the revenues and expenses of a
business for a specific period of time, such as a month or a year, is called a(n) -
answers Income Statement
Which of the following would be included on an income statement? - answers Rent
expense
Expenses generally cause - answers A decrease in net assets
Which of the following activities would NOT be classified as an investing activity? -
answers Purchase of inventory
Which of the following classifications refers to those activities whereby cash is obtained
or repaid to owners and creditors? - answers Financing
, During the month, Meridian Company had the following cash transactions:
Cash collected from customers
$ 12,500
Cash received from a loan
8,000
Cash paid for wages payable
(5,750)
Cash paid for the purchase of a building
(15,000)
Cash received for the issuance of new shares of stock
2,600
Cash received from sale of land
6,400
Cash paid for rent
(2,500)
Cash paid for dividends
(1,500)
Given the above information, compute cash flow from operating activities. - answers
$4,250
Operating activities: $12,500 - $5,750 - $2,500 = $4,250
Which of the following classifications refers to those activities that are part of the day-to-
day business of a company? - answers Operating
Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - answers Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a
firm's - answers Notes to financial statements
Which of the following is NOT one of the four general types of financial statement
notes? - answers Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be
explained in the notes to the financial statements? - answers The method used to
estimate depreciation on a piece of equipment
Which of the following is an example of a disclosure of information NOT recognized that
would be explained in the notes to the financial statements? - answers The disclosure of
the uncertain, potential outcome of a lawsuit
