,Chapter M:1 WD Introduction to Managerial Accounting WD WD WD
Learning Objective M:1-1 WD WD
1) Managerial accounting focuses on providing information for internal planning and control.A
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nswer: TRUE W D
Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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2) Financial accounting prepares reports for internal purposes, whereas managerial accounting providesin
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formation to external stakeholders. WD WD WD
Answer: W D FALSE
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
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managerial accounting serves the needs of managers and internal staff.
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Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
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PE Question Type:
WD WD W D Concept
H2: W D Why Is Managerial Accounting Important? (H1)
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3) Financial statements prepared for investors and creditors often include forward-
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looking informationbecause they make decisions based on a company's future prospects.
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Answer: W D FALSE
Explanation: Financial statements provide mostly historical information; relevant and faithfullyrepresentative
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D W
D information and focused on the past. WD WD WD WD WD
Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.A
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nswer: FALSE W D
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept ofusef
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,ulness to management for decision making purposes.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type:
WD WD W D Concept
, H2: W D Why Is Managerial Accounting Important? (H1)
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5) Financial reporting is typically much more detailed than managerial accounting.A
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nswer: FALSE W D
Explanation: Financial reporting is typically less detailed than managerial accounting information. Fin
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ancial accounting reporting is usually summary reports, prepared primarily on the company as awhol
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D
e, usually on a quarterly or annual basis.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type:
WD WD W D Concept
H2: W D Why Is Managerial Accounting Important? (H1)
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6) Managerial accounting provides financial statements that report results of operations, financialp
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D
osition, and cash flows both to managers and to external stockholders.
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Answer: W D FALSE
Explanation: Managerial accounting provides the information needed to plan and control operations andt
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D
herefore serves the information needs of internal parties such as managers and staff.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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7) Which of the following is a focus of managerial accounting?
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A) to generate a company's financial statements for tax reporting
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B) to provide information to business managers to assist them in controlling their businesses
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C) to provide information to shareholders to assist them with their investment decisions
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D) to ensure that the reports produced for internal and external business purposes are GAAP compliant
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D
Answer: B W D
Diff: 1 WD
LO: M:1-1
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AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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8) Which of the following statements is true of managerial accounting?
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A) The external stakeholders of a company are the primary users of managerial accounting.
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B) Managerial accounting information is used to help managers plan, direct and control their operations.
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Learning Objective M:1-1 WD WD
1) Managerial accounting focuses on providing information for internal planning and control.A
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D
nswer: TRUE W D
Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type: Concept
WD WD W D
H2: Why Is Managerial Accounting Important? (H1)
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2) Financial accounting prepares reports for internal purposes, whereas managerial accounting providesin
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D
formation to external stakeholders. WD WD WD
Answer: W D FALSE
Explanation: The reverse is true. Financial accounting serves external stakeholder information needswhile
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D WD
managerial accounting serves the needs of managers and internal staff.
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Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
W D WD WD W
D
CPA Functional: Reporting
WD W D
PE Question Type:
WD WD W D Concept
H2: W D Why Is Managerial Accounting Important? (H1)
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3) Financial statements prepared for investors and creditors often include forward-
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looking informationbecause they make decisions based on a company's future prospects.
WD W
D WD WD WD WD WD WD WD WD WD
Answer: W D FALSE
Explanation: Financial statements provide mostly historical information; relevant and faithfullyrepresentative
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D W
D information and focused on the past. WD WD WD WD WD
Diff: 1 WD
LO: M:1-1 W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type: Concept
WD WD W D
H2: Why Is Managerial Accounting Important? (H1)
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4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP.A
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D
nswer: FALSE W D
Explanation: Managerial accounting information is not guided by GAAP but rather by the concept ofusef
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D
,ulness to management for decision making purposes.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type:
WD WD W D Concept
, H2: W D Why Is Managerial Accounting Important? (H1)
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5) Financial reporting is typically much more detailed than managerial accounting.A
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D
nswer: FALSE W D
Explanation: Financial reporting is typically less detailed than managerial accounting information. Fin
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ancial accounting reporting is usually summary reports, prepared primarily on the company as awhol
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D
e, usually on a quarterly or annual basis.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type:
WD WD W D Concept
H2: W D Why Is Managerial Accounting Important? (H1)
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6) Managerial accounting provides financial statements that report results of operations, financialp
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D
osition, and cash flows both to managers and to external stockholders.
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Answer: W D FALSE
Explanation: Managerial accounting provides the information needed to plan and control operations andt
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D
herefore serves the information needs of internal parties such as managers and staff.
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Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
WD W D
PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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7) Which of the following is a focus of managerial accounting?
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A) to generate a company's financial statements for tax reporting
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B) to provide information to business managers to assist them in controlling their businesses
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C) to provide information to shareholders to assist them with their investment decisions
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D) to ensure that the reports produced for internal and external business purposes are GAAP compliant
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D
Answer: B W D
Diff: 1 WD
LO: M:1-1
W D
AACSB: Application of knowledgeAI
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D
CPA Functional: Reporting
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PE Question Type: Concept
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H2: Why Is Managerial Accounting Important? (H1)
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8) Which of the following statements is true of managerial accounting?
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A) The external stakeholders of a company are the primary users of managerial accounting.
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B) Managerial accounting information is used to help managers plan, direct and control their operations.
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