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1 Copyright © 2016 Pearson Education, Inc.Horngren's Financial and Managerial Accounting, 5e (Miller-Nobles) Chapter 16 Introduction to Managerial Accounting
Learning Objective 16-1
1) Managerial accounting focuses on providing information for internal planning and control.
Answer: TRUE
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.
Answer: FALSE
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
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
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.
Answer: FALSE
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
5) A budget is a managerial accounting tool used in the planning process.
Answer: TRUE
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
Horngrens Financial and Managerial Accounting The Managerial Chapters 5th Edition Miller-Nobles Test Bank Visit TestBankDeal.com to get complete for all chapters
2 Copyright © 2016 Pearson Education, Inc.6) Financial reporting is typically much more detailed than managerial accounting.
Answer: FALSE
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
7) Which of the following is an objective of managerial accounting?
- to generate a company's financial statements for tax reporting
- to provide information to business managers to assist them in controlling their business
- to provide information to shareholders to assist them with their investment decisions
- to ensure that the reports produced for internal and external business purposes are GAAP compliant
Answer: B
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
8) Which of the following statements is true of managerial accounting?
- The external stakeholders of a company are the primary users of managerial accounting.
- Managerial accounting information is used to help managers plan and control their operations.
- An external audit by an independent CPA is required for managerial accounting information.
- Managerial accounting information must comply with Generally Accepted Accounting Principles.
Answer: B
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
9) Managerial accounting information for a company is primarily used by ________.
- its customers to understand the pricing of the product
- its creditors to understand the credibility of the business
- its employees to plan and control operations
- its investors to make their investment decisions
Answer: C
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
3 Copyright © 2016 Pearson Education, Inc.10) Which of the following statements is true of financial accounting?
- It provides information to investors needed for their investment decisions.
- It provides forward-looking information needed for managing and delegating operations.
- It focuses on detailed reports for parts of the company rather than the whole company.
- It focuses on planning and controlling day-to-day operations.
Answer: A
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
11) Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?
- comparing actual performance to previously budgeted amounts
- creating detailed budgets
- implementing operational plans
- evaluating results of operations
Answer: B
Diff: 1
LO: 16-1
AACSB: Analytical thinking
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
12) Comparing actual performance to previously budgeted amounts is part of the ________.
- controlling function of managerial accounting
- planning function of managerial accounting
- reporting function of managerial accounting
- organizing function of managerial accounting
Answer: A
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
13) Which of the following is the primary objective of managerial accounting?
- providing information that managers need to make operational decisions
- providing historical data to investors and creditors
- providing summarized results of operations
- providing information to comply with laws and regulations of government bodies
Answer: A
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
4 Copyright © 2016 Pearson Education, Inc.14) Which of the following is the primary focus of financial accounting?
- providing information that managers need to make operational decisions
- providing summarized information on operational results to investors and creditors
- providing budgets for future periods
- providing highly detailed information on product lines, regions, and divisions
Answer: B
Diff: 1
LO: 16-1
AICPA Functional: Reporting
PE Question Type: Concept
H2: Financial Versus Managerial Accounting
15) For each of the following, indicate whether the statement relates to managerial accounting (MA) or
financial accounting (FA):
Statement Applies to MA or FA How reports will affect employee behavior is a concern.Summary reports are prepared primarily on the company as a whole, usually on a quarterly or annual basis.Relevant information and focus on the future.Primary users include investors, creditors, and government authorities.There is no requirement to follow GAAP.
Answer:
Statement Applies to MA or FA How reports will affect employee behavior is a concern.
MA Summary reports are prepared primarily on the company as a whole, usually on a quarterly or annual basis.
FA Relevant information and focus on the future. MA Primary users include investors, creditors, and government authorities.
FA There is no requirement to follow GAAP. MA
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