Solution Manual for Managerial Accounting, 7th Edition,

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Solution Manual for Managerial Accounting, 7th Edition, James Jiambalvo, ISBN: 1119577705, ISBN:

9781119577706

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Horngren's Cost Accounting: A Managerial Emphasis, 17e by Datar/Rajan

Chapter 1 The Manager and Management Accounting

Objective 1.1

1) Management accounting:

• focuses on estimating future revenues, costs, and other measures to forecast activities and their results
• provides information about the company as a whole
• reports information that has occurred in the past that is verifiable and reliable
• provides information that is generally available only on a quarterly or annual basis

Answer: A

Explanation: A) Management accounting has a forward-looking orientation as opposed to financial accounting which has a historical perspective.

Diff: 1

Objective: 1

AACSB: Analytical thinking

2) Managers use management accounting information to:

• help external users such as investors, banks, regulators, and suppliers
• communicate, develop, and implement strategies
• communicate a firm's financial position to investors, banks, regulators, and other outside parties
• ensure that financial statements are consistent with the SEC rules

Answer: B

Diff: 1

Objective: 1

AACSB: Analytical thinking

3) Financial accounting:

• focuses on the future and includes activities such as preparing next year's operating budget
• must comply with GAAP (generally accepted accounting principles)
• is the process of measuring, analyzing, and reporting financial and nonfinancial information related to

the costs of acquiring or using resources in an organization

• is prepared for the use of department heads and other employees

Answer: B

Diff: 1

Objective: 1

AACSB: Analytical thinking

4) Which of the following would most likely be the user of financial accounting information?

• factory shift supervisor
• distribution manager
• current shareholder
• department manager

Answer: C

Diff: 1

Objective: 1

AACSB: Analytical thinking

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5) The primary user of management accounting information is a(n):

• the controller
• a shareholder evaluating a stock investment
• bondholder
• external regulator

Answer: A

Diff: 1

Objective: 1

AACSB: Analytical thinking

6) Financial accounting provides the primary source of information for:

• decision making in the assembly and finishing department
• improving distribution and customer service
• preparing the income statement for shareholders and other external parties
• planning next year's plans and specifically; the operating budget

Answer: C

Diff: 1

Objective: 1

AACSB: Analytical thinking

7) Which of the following is true of management accounting information?

• It focuses on documenting past business actions of a firm.
• It is prepared based on SEC rules and FASB accounting principles.
• It is prepared for shareholders.
• It helps with the coordination of elements of the value chain.

Answer: D

Diff: 2

Objective: 1

AACSB: Analytical thinking

8) Which of the following statements refers to management accounting information?

• There are no regulations governing the reports.
• The reports are generally delayed and historical.
• The audience tends to be stockholders, creditors, and tax authorities.
• It primarily measures manager's compensation on reported financial results.

Answer: A

Diff: 2

Objective: 1

AACSB: Analytical thinking

9) Which of the following groups would be least likely to receive detailed management accounting reports?

• stockholders
• sales managers
• production supervisors
• distribution managers

Answer: A

Diff: 1

Objective: 1

AACSB: Analytical thinking

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10) Management accounting information typically includes:

• tabulated results of customer satisfaction surveys
• the cost of producing a product
• the percentage of units produced that are defective
• All of these answers are correct.

Answer: D

Diff: 1

Objective: 1

AACSB: Application of knowledge

11) Cost accounting:

• measures the costs of acquiring or using resources in an organization
• measures the financial and nonfinancial information that helps managers make decisions to fulfill the

goals of an organization

• coordinates product design, production, and marketing decisions and evaluate a company's

performance

• communicates information to investors, banks, regulators, and other outside parties

Answer: A

Diff: 1

Objective: 1

AACSB: Analytical thinking

12) Which of the following differentiates cost accounting and financial accounting?

• The primary users of cost accounting are the investors, whereas the primary users of financial

accounting are the managers.

• Cost accounting deals with product design, production, and marketing strategies, whereas financial

accounting deals mainly with pricing of the products.

• Cost accounting measures only the financial information related to the costs of acquiring fixed assets in

an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions.

• Cost accounting measures information related to the costs of acquiring or using resources in an

organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties.

Answer: D

Diff: 2

Objective: 1

AACSB: Analytical thinking

13) Which of the following is true of financial accounting information?

• It is prepared based on cost-benefit analysis.
• It is primarily used by managers to make internal business decisions.
• It focuses on the past-oriented financial performance of a company.
• It only measures the cash transactions of a company.

Answer: C

Diff: 2

Objective: 1

AACSB: Analytical thinking