Question 1

The verification process for managerial accounting requires an independent audit by chartered accountants.

Accepted Answer

The verification process for managerial accounting does not require an independent audit by chartered accountants. It is usually done internally by the company's own accounting staff. However, external audits may be conducted for financial reporting purposes.

Question 2

The content of managerial accountants' reports is very detailed and includes non-financial data relevant to business decision-making.

Accepted Answer

Managerial accountants' reports provide detailed information that includes financial and non-financial data. This information helps business decision-makers make informed decisions that consider all pertinent factors affecting the organization.

Question 3

Managerial accounting applies only to manufacturing companies.

Accepted Answer

Managerial accounting applies to all types of companies, not just manufacturing companies. It involves providing financial information to internal users such as managers to help them make better business decisions.

Question 4

Companies rely upon management accountants to collect non-financial information in order to assess how well the companies' resources are being used.

Accepted Answer

Management accountants are responsible for collecting and analyzing both financial and non-financial information to provide insights and recommendations on how to improve a company's performance and resource allocation. Non-financial information can include data on customer satisfaction, employee engagement, product quality, and market trends.

Question 5

Detailed reports scrutinized by managerial accountants include those focused on business sub-units.

Accepted Answer

Managerial accountants typically focus on generating detailed reports for specific business sub-units, such as departments, product lines, or geographical regions, in order to provide insights and make informed decisions about each unit's performance and efficiency.

Question 6

Organization charts are common in companies but not relevant to managerial accounting.

Accepted Answer

Organization charts are relevant to managerial accounting as they help in understanding the structure, roles, and responsibilities within a company, which is essential for planning, controlling, and decision-making processes.

Question 7

Management accounting and financial accounting, while in the same field, are mutually exclusive disciplines.

Accepted Answer

Management accounting and financial accounting are related disciplines and have some overlap. Financial accounting focuses on preparing financial statements for external stakeholders, while management accounting provides information to internal stakeholders to make strategic decisions. However, the two disciplines are not mutually exclusive as they both involve the use of accounting information to support decision-making in an organization.

Question 8

Management accounting is a discipline with a rather narrow scope for career advancement.

Accepted Answer

Management accounting offers many opportunities for career advancement, including positions such as financial analyst, controller, and chief financial officer (CFO). Additionally, management accountants may specialize in areas such as cost accounting, budgeting, or performance management, opening up even more career paths.

Question 9

Decision-making is an integral part of the planning, directing, and motivating functions, but not of the controlling function.

Accepted Answer

Decision-making is a part of all four functions of management, including controlling. In the controlling function, decisions are made to monitor and adjust performance to ensure that goals are achieved.

Question 10

Given the decision to employ straight-line amortization or a usage-based amortization method, the management accountant's need to report the most relevant economic information to external users will determine which method is used.

Accepted Answer

The answer of Given the decision to employ straight-line amortization...

Question 11

Reports prepared in managerial accounting are general-purpose reports, whereas reports prepared in financial accounting are usually special-purpose reports.

Accepted Answer

Managerial accounting reports are typically special-purpose reports tailored for internal management needs, while financial accounting reports are general-purpose reports intended for external stakeholders.

Question 12

A primary outcome of managerial accounting is the determination of costs for manufactured items and services.

Accepted Answer

Yes, determining costs for manufactured items and services is a primary outcome of managerial accounting.

Question 13

The management function of planning is mainly concerned with setting goals and objectives for the entity.

Accepted Answer

Planning involves the process of setting goals and objectives for the entity, determining the necessary resources and actions required to achieve those goals, and establishing strategies for overcoming possible obstacles.

Question 14

Management accounting is a sub-discipline within accounting focusing solely on the provision of economic and financial information for external users.

Accepted Answer

Management accounting is a sub-discipline within accounting focusing on the provision of economic and financial information for internal users, such as managers and executives within a company.

Question 15

Managerial accounting information generally pertains to an entity as a whole and is very detailed.

Accepted Answer

Managerial accounting information focuses on specific areas or departments within an entity and is less detailed than financial accounting information. It is used by internal users such as managers and decision makers to make informed business decisions.

Question 16

An organization chart in a manufacturing company replaces the chart of accounts.

Accepted Answer

An organization chart and a chart of accounts serve different purposes. An organization chart defines the structure and hierarchy of a company, while a chart of accounts is a list of all the accounts used by the company to record financial transactions. Both are important for a manufacturing company, but they serve different functions and do not replace each other.

Question 17

Managerial accounting internal reports are prepared less frequently than are classified financial statements.

Accepted Answer

Managerial accounting internal reports are typically prepared more frequently, often monthly, weekly, or even daily, to assist managers in decision-making, whereas classified financial statements are usually prepared quarterly or annually for external reporting.

Question 18

Fundamentally, managerial accounting applies best to the manufacturing context.

Accepted Answer

Managerial accounting can be applied to any type of organization or business, including service-based industries and nonprofit organizations, not just manufacturing. While some of the techniques and terminology may differ depending on the industry, the principles of managerial accounting are universal.

Question 19

Directing is the process of determining whether planned goals are being met.

Accepted Answer

Directing involves guiding and motivating employees to meet the organization's objectives, while determining whether planned goals are being met is part of the controlling function.

Question 20

Determining the unit cost of manufacturing a product is an output of managerial accounting.

Accepted Answer

Managerial accounting involves analyzing and providing information for internal use by management. One of the key functions of managerial accounting is to determine the cost of manufacturing a product, which includes calculating the unit cost.

Quiz 1: Managerial Accounting