Deck 1: Introduction to Managerial Accounting

Question 1

1-6 Directing means setting goals and objectives for the company and determining how to achieve them.

Answer 1

False

Question 2

1-12 Which of the following management responsibilities is being fulfilled when management decides to move production to another country to lower costs?

A)Directing
B)Planning
C)Decision-making
D)All of the above

Answer 2

D

Question 3

1-14 Using product cost information to determine sales prices is an example of:

A)controlling,planning,and decision-making.
B)directing,controlling,and planning.
C)directing,planning,and decision-making.
D)controlling,directing,and planning.

Answer 3

C

Question 4

1-8 Which of the following is NOT one of the primary responsibilities of management?

A)Controlling
B)Decision-making
C)Adhering to GAAP
D)Directing

Question 5

1-9 Planning involves which of the following activities?

A)Setting goals and objectives for the company
B)Overseeing the company's day-to-day operations
C)Evaluating the results of operations
D)None of the above

Question 6

1-10 When management compares the budget to actual results,which of the following is being fulfilled?

A)Directing
B)Controlling
C)Decision-making
D)Planning

Question 7

1-4 The four primary responsibilities of managers are planning,directing,controlling,and decision making.

Question 8

1-15 Reviewing hourly sales reports to determine the level of staffing needed to service customers fulfills which of management's four primary responsibilities?

A)Directing,planning,and decision-making
B)Directing,controlling,and planning
C)Controlling,planning,and decision-making
D)Analyzing,directing,and planning

Question 9

1-16 Budgets are the way that managers can express their:

A)plans.
B)decision-making.
C)control.
D)hiring practices.

Question 10

1-2 Managerial accounting gathers,summarizes,and reports the cost and revenue data relevant to each decision that is made.

Question 11

1-13 Which one of the following manager responsibilities encompasses the other three?

A)Decision-making
B)Feedback
C)Planning
D)Controlling

Question 12

1-7 Budgets are the quantitative expression of management's plans.

Question 13

1-17 Comparing actual results to budgets is an example of the management function of:

A)controlling.
B)decision-making.
C)directing.
D)planning.

Question 14

1-20 Evaluating results against the plan is an example of the management function of:

A)controlling.
B)decision-making.
C)directing.
D)planning.

Question 15

1-3 Evaluating the results of business operations against a plan and then making adjustments to that plan is called budgeting.

Question 16

1-21 What are the four primary responsibilities of managers as described in the chapter? Give an example of each type of responsibility.

Question 17

1-19 Preparing budgets is an example of the management function of:

A)controlling.
B)decision-making.
C)directing.
D)planning.

Question 18

1-11 Which of the following management responsibilities are being fulfilled when management uses feedback to take corrective action on the budgets?

A)Directing and planning
B)Planning and decision-making
C)Controlling and decision-making
D)Planning and controlling

Question 19

1-1 Controlling means overseeing the company's day-to-day operations.

Question 20

1-18 Overseeing the day-to-day operations of a company is an example of the management function of:

A)controlling.
B)decision-making.
C)directing.
D)planning.

Question 21

2-9 Managerial accounting reports are always prepared on a quarterly and annual basis.

Question 22

2-8 Managerial accounting information tends to report on segments of the business.

Question 23

2-14 Which of the following types of information are used in managerial accounting?

A)Financial information
B)Nonfinancial information
C)Forecasts of future earnings
D)All of the above

Question 24

2-11 Which of the following statements is TRUE about managerial accounting information?

A)It is prepared annually and quarterly.
B)It is audited by CPAs.
C)It emphasizes relevance.
D)It must be prepared in conformity with generally accepted accounting principles (GAAP).

Question 25

2-10 Managerial information is always based on historical transactions with external parties.

Question 26

2-15 Which of the following persons or groups would be LEAST likely to receive detailed managerial accounting reports?

A)Plant managers
B)Current shareholders
C)Sales territory managers
D)CEO

Question 27

2-6 The primary managerial accounting product is the company's audited financial statements.

Question 28

2-4 The primary purpose of managerial accounting information is to help external users make investing and lending decisions.

Question 29

2-2 GAAP must be followed when managerial accounting reports are prepared.

Question 30

2-5 The primary users of managerial accounting information are internal users such as managers.

Question 31

2-1 The design of a management accounting system should consider how reports affect employees' behavior.

Question 32

2-7 Managerial accounting information emphasizes relevance,more than reliability and objectivity.

Question 33

2-17 The primary goal of managerial accounting is to provide information to:

A)shareholders.
B)creditors.
C)internal decision-makers.
D)both shareholders and creditors.

Question 34

2-12 Management accounting focuses on:

A)external reporting.
B)internal reporting.
C)tax preparation.
D)auditing.

Question 35

2-16 Which of the following types of accounting is designed to meet the needs of decision-makers inside a company?

A)Audit accounting
B)Financial accounting
C)Managerial accounting
D)Tax accounting

Question 36

2-19 Which of following is TRUE?

A)Management accounting focuses on historical transactions.
B)Financial accounting uses the cash basis for recording transactions.
C)Financial accounting focuses on future data.
D)Management accounting focuses on relevant data.

Question 37

2-20 Which statement is TRUE?

A)Management uses reports created for internal parties.
B)Management uses financial information to plan internal operations.
C)Management uses financial information to analyze costs.
D)All of the above are true.

Question 38

2-13 The person MOST likely to use ONLY financial accounting information would be the:

A)bank loan officer.
B)plant manager.
C)vice president of plant operations.
D)product manager.

Question 39

2-3 Management accounting requires independent audits of the firm's books.

Question 40

2-18 The primary goal of financial accounting is to provide information for:

A)potential investors.
B)creditors.
C)governmental regulators.
D)all of the above.

Question 41

Discuss at least four differences between financial accounting and managerial accounting.

Question 42

3-7 Technology has been a driving factor in the changing roles of management accountants.

Question 43

2-23 Which of the following are the internal decision-makers of a company?

A)Vendors
B)Customers
C)Managers
D)Shareholders

Question 44

3-4 In most companies,managerial accountants no longer perform routine mechanical accounting tasks.

Question 45

2-25 Which of the following groups are external users of financial information?

A)Customers of the company
B)Vendors of the company
C)Potential investors of the company
D)All of the above

Question 46

2-32 Is financial accounting or managerial accounting more useful to a plant (factory)manager? Explain your answer.

Question 47

2-30 Information for internal parties about past performance is provided by:

A)budget reports.
B)financial accounting reports.
C)managerial accounting reports.
D)planning reports.

Question 48

3-5 Managerial accountants are now considered to be similar to advisors and business analysts.

Question 49

3-2 The treasurer and the controller report directly to the CFO.

Question 50

3-6 Oral and written communications skills are considered among the most valuable skills a management accountant can possess.

Question 51

2-24 Which of the following reports must be audited by an outside agency?

A)Annual financial statements
B)Monthly financial statements
C)Annual financial budgets
D)All of the above

Question 52

2-22 Which of the following is TRUE?

A)Managerial accounting reports are audited by CPAs.
B)Managerial accounting reports provide detailed internal information.
C)Managerial accounting reports aid potential investors.
D)Managerial accounting reports must follow GAAP.

Question 53

3-8 Management accountants spend more time planning,analyzing and interpreting accounting data and less time recording routine accounting transactions than they have in the past.

Question 54

2-26 Which of the following groups are most likely to use a company's budget information?

A)Managers
B)Customers
C)Creditors
D)Suppliers

Question 55

2-21 Which of the following statements is FALSE?

A)Financial accounting provides sufficient information for managers to effectively plan and control operations.
B)Financial accounting reports help creditors make decisions.
C)Financial accounting helps investors make decisions.
D)Financial accounting provides external reports.

Question 56

2-29 Information for external parties about past performance is provided by:

A)budget reports.
B)financial accounting reports.
C)managerial accounting reports.
D)planning reports.

Question 57

3-3 The internal audit department reports directly to the subcommittee of the board of directors called the audit committee.

Question 58

3-1 The CFO of a company is responsible for the day-to-day running of the company.

Question 59

2-27 Decision makers inside a company are its:

A)creditors.
B)customers.
C)managers.
D)shareholders.

Question 60

2-28 Owners of a company are its:

A)creditors.
B)customers.
C)managers.
D)shareholders.

Question 61

3-11 Which of the following certifications is issued by the IMA?

A)CPA
B)CMA
C)CIA
D)CFP

Question 62

3-17 Which of the following report to the audit committee of the Board of Directors?

A)The treasurer and controller
B)The CFO and internal audit department
C)The internal audit department and the independent CPA firm
D)The CFO and the independent CPA firm

Question 63

3-24 Which person or group is NOT an employee of a corporation?

A)The CFO
B)A member of the audit committee
C)The Treasurer
D)The VP of manufacturing

Question 64

3-12 A CFO would have all of the following responsibilities EXCEPT:

A)preparing all corporate tax returns.
B)managing corporate financing.
C)providing reports to creditors as required.
D)investing in new equipment.

Question 65

3-26 Managerial accountants often work on teams called:

A)audit teams.
B)cross-functional teams.
C)multi-functional teams.
D)workgroups.

Question 66

3-9 The only skill required of managerial accountants is that they have a solid knowledge of both financial and managerial accounting.

Question 67

3-22 Which of the following skills are required of managerial accountants?

A)The ability to work on a team
B)Analytical skills
C)Oral and written communication skills
D)All of the above

Question 68

3-23 Which would be a subgroup of the Board of Directors?

A)Audit committee
B)Financial committee
C)Managerial committee
D)Stockholders' committee

Question 69

3-18 Who is primarily responsible for raising capital and investing funds?

A)The CEO
B)The CFO
C)The COO
D)The Treasurer

Question 70

3-13 Who typically manages the daily operations of a company?

A)Stockholders
B)The controller
C)The company's board of directors
D)The CEO

Question 71

3-16 The COO is responsible for managing which of the following aspect(s)of the company?

A)Internal controls
B)The annual audit
C)Financial,managerial,and tax accounting
D)Research and development,production,and distribution

Question 72

3-10 Managerial accountants only need a solid understanding of managerial accounting,and not financial accounting.

Question 73

3-20 Managerial accountants perform which of the following tasks?

A)Ensure financial records are correct
B)Help design information systems
C)Provide decision support
D)All of the above

Question 74

3-27 A company's Board of Directors meets:

A)annually.
B)monthly.
C)periodically,as needs dictate.
D)quarterly.

Question 75

3-28 Who requires companies listed on the New York Stock Exchange to have an internal audit function?

A)The Board of Directors
B)The NYSE
C)The internal revenue service (IRS)
D)The stockholders

Question 76

3-15 The vice-president of operations directly reports to which person(s)?

A)The CFO
B)The COO
C)The CEO
D)The Board of Directors

Question 77

3-19 What has been the determining factor in the way that we now view managerial accountants?

A)Stricter audit standards
B)Stricter GAAP standards
C)Technology
D)None of the above

Question 78

3-25 Which person is hired directly by the board of directors to run the company?

A)The Treasurer
B)The CEO
C)The CFO
D)The COO

Question 79

3-21 Managerial accountants may be responsible for:

A)analyzing data.
B)communicating results.
C)providing decision support.
D)all of the above.

Question 80

3-14 Who typically provides oversight for large corporations?

A)Stockholders
B)The CEO
C)The Board of Directors
D)The company president