Question 1

Financial reporting is typically much more detailed than managerial accounting.

Accepted Answer

Managerial accounting often includes more detailed information tailored for internal decision-making, whereas financial reporting is designed to present a broad overview of the company's financial performance and position for external stakeholders.

Question 2

Managerial accounting provides financial statements that report results of operations,financial position,and cash flows both to managers and to external stockholders.

Accepted Answer

Managerial accounting provides the information needed to plan and control operations.

Question 3

How is the management of a company accountable to its employees?
A) The management must provide products that are safe and free of defects.
B) The management must provide a safe workplace.
C) The management must ensure that it earns a net positive return on its investments.
D) The management must ensure the business is environmentally responsible to its community.

Accepted Answer

The management of a company is accountable to its employees by providing a safe workplace. This includes taking measures to prevent accidents and injuries, providing appropriate safety equipment, and complying with relevant health and safety regulations. It is the responsibility of the management to ensure that employees are not exposed to unnecessary risks in the workplace.

Question 4

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?
A) comparing actual performance to previously budgeted amounts
B) creating detailed budgets
C) implementing operational plans
D) evaluating results of operations

Accepted Answer

The creation of detailed budgets is a key element in the planning function of managerial accounting. This involves setting specific targets for revenues, expenses, and other important financial metrics, which can then be used to guide decision making and evaluate performance. While comparing actual performance to budgeted amounts, implementing operational plans, and evaluating results of operations are all important aspects of managerial accounting, they are typically associated with other functions such as controlling, directing, and monitoring.

Question 5

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

Accepted Answer

This statement is false. Financial accounting provides information to external stakeholders such as investors, creditors, and regulators, while managerial accounting provides information for internal purposes such as decision-making, planning, and control.

Question 6

Which of the following statements is true of managerial accounting?
A) The external stakeholders of a company are the primary users of managerial accounting.
B) Managerial accounting information is used to help managers plan and control their operations.
C) An external audit by an independent CPA is required for managerial accounting information.
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.

Accepted Answer

Managerial accounting is primarily used for internal management purposes. It provides information to managers to help them make informed decisions regarding planning, controlling, and decision-making in their operations. The external stakeholders such as investors and creditors primarily use financial accounting information. An external audit is not required for managerial accounting information, and it doesn't necessarily need to follow Generally Accepted Accounting Principles (GAAP) as it's not meant for external reporting.

Question 7

Which of the following is the primary focus of financial accounting?
A) providing information that managers need to make operational decisions
B) providing summarized information on operational results to investors and creditors
C) providing budgets for future periods
D) providing highly detailed information on product lines, regions, and divisions

Accepted Answer

Financial accounting is primarily focused on providing summarized financial information to investors and creditors. The purpose of financial accounting is to produce financial statements, which provide information about the performance, financial position, and cash flows of an organization. This information is useful to investors and creditors who are interested in assessing an organization's ability to generate profits, pay off debts, and provide a return on investment. Financial accounting is less concerned with providing operational information for managers, which is the focus of managerial accounting. Providing budgets for future periods is also not the primary focus of financial accounting, although financial information may be used to inform budgeting decisions. While financial accounting does involve detailed information on product lines, regions, and divisions, this information is typically presented in summary form on financial statements rather than in highly detailed reports.

Question 8

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Accepted Answer

The answer of Financial statements prepared for investors and creditors...

Question 9

Which of the following is the primary objective of managerial accounting?
A) providing information that managers need to make operational decisions
B) providing historical data to investors and creditors
C) providing summarized results of operations
D) providing information to comply with laws and regulations of government bodies

Accepted Answer

The primary objective of managerial accounting is to provide information to internal managers to make operational decisions, such as budgeting, forecasting, and performance measurement. Option B relates to financial accounting, C relates to financial reporting, and D relates to compliance accounting.

Question 10

Which of the following is an objective of managerial accounting?
A) to generate a company's financial statements for tax reporting
B) to provide information to business managers to assist them in controlling their business
C) to provide information to shareholders to assist them with their investment decisions
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant

Accepted Answer

The objective of managerial accounting is to provide information to managers to assist them in making informed business decisions and controlling their business. The other options may be outcomes or requirements of managerial accounting but are not its primary objective.

Question 11

Managerial accounting focuses on providing information for internal planning and control.

Accepted Answer

Managerial accounting is concerned with providing information to managers within an organization. It is focused on aiding decision making, planning and controlling operations, and monitoring performance. Therefore, it is true that managerial accounting concentrates on providing information for internal planning and control.

Question 12

Management's accountability to its suppliers and vendors is to ________.
A) provide products to customers that are safe and free of defects
B) obey laws and pay taxes timely
C) provide a return on shareholders' investment
D) make timely payments and comply with contract terms

Accepted Answer

Management's accountability to its suppliers and vendors is to make timely payments and comply with contract terms. This ensures a good relationship with suppliers and vendors and helps to maintain the flow of goods and services. A, B, and C are also important responsibilities of management, but they do not specifically relate to suppliers and vendors.

Question 13

Which of the following statements is true of financial accounting?
A) It provides information to investors needed for their investment decisions.
B) It provides forward-looking information needed for managing and delegating operations.
C) It focuses on detailed reports for parts of the company rather than the whole company.
D) It focuses on planning and controlling day-to-day operations.

Accepted Answer

Financial accounting primarily provides information to investors and other external stakeholders who need to make investment decisions. It focuses on providing accurate and timely financial statements that summarize a company's financial performance and position, giving investors insight into the company's ability to generate profits and manage risks. B, C, and D are not accurate descriptions of financial accounting.

Question 14

Managerial accounting information for a company is primarily used by ________.
A) its customers to understand the pricing of the product
B) its creditors to understand the credibility of the business
C) its employees to plan and control operations
D) its investors to make their investment decisions

Accepted Answer

Managerial accounting information is primarily used by the company's internal stakeholders, such as its management and employees, to plan and control operations, make strategic decisions, and improve performance. While information may be shared with external stakeholders, such as investors or creditors, the primary focus is on providing useful information for internal decision-making.

Question 15

Comparing actual performance to previously budgeted amounts is part of the ________.
A) controlling function of managerial accounting
B) planning function of managerial accounting
C) reporting function of managerial accounting
D) organizing function of managerial accounting

Accepted Answer

Comparing actual performance to previously budgeted amounts falls under the controlling function of managerial accounting, which involves monitoring and adjusting performance to ensure that objectives and goals are met. This is done by analyzing actual results and comparing them to budgets or standards, identifying variances, and taking corrective actions when necessary.

Question 16

For each of the following,indicate whether the statement relates to managerial accounting (MA)or financial accounting (FA):
 $$\begin{array} { | l | l | } 
\hline \text { Statement } & \begin{array} { l } 
\text { Applies to } \
\text { MA or FA }
\end{array} \
\hline \text { How reports will affect employee behavior is a } & \
\text { concern. } & \
\hline \text { Summary reports are prepared primarily on the } & \
\text { company as a whole, usually on a quarterly or annual } & \
\text { basis. } & \
\hline \text { Relevant information and focus on the future. } & \
\hline \text { Primary users include investors, creditors, and } & \
\text { government authorities. } & \
\hline \text { There is no requirement to follow GAAP. } & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following,indicate whether the...

Question 17

Management accountability is the manager's responsibility to the various stakeholders of the company to maximize profits.

Accepted Answer

Management accountability is the manager's responsibility to the various stakeholders of the company to wisely manage the resources of the organization.

Question 18

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

Accepted Answer

Managerial accounting reports are internal and do not need to follow the rules of GAAP (Generally Accepted Accounting Principles) or the guidelines of the Securities and Exchange Commission (SEC), which are required for external financial reporting.

Question 19

A budget is a managerial accounting tool used in the planning process.

Accepted Answer

A budget is a financial plan that outlines the expected income and expenses for a specific period. It is used in the planning process to help management make informed decisions regarding the allocation of resources to achieve the organization's goals. Thus, it is a managerial accounting tool.

Question 20

Define planning.List and briefly discuss a planning tool that managers can use.

Accepted Answer

The answer of Define planning.List and briefly discuss a planning...

Quiz 18: Introduction to Managerial Accounting

Financial reporting is typically much more detailed than managerial accounting.

Managerial accounting provides financial statements that report results of operations,financial position,and cash flows both to managers and to external stockholders.

How is the management of a company accountable to its employees?

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

Which of the following statements is true of managerial accounting?

Which of the following is the primary focus of financial accounting?

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Which of the following is the primary objective of managerial accounting?

Which of the following is an objective of managerial accounting?

Managerial accounting focuses on providing information for internal planning and control.

Management's accountability to its suppliers and vendors is to ________.

Which of the following statements is true of financial accounting?

Managerial accounting information for a company is primarily used by ________.

Comparing actual performance to previously budgeted amounts is part of the ________.

Management accountability is the manager's responsibility to the various stakeholders of the company to maximize profits.

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

A budget is a managerial accounting tool used in the planning process.

Define planning.List and briefly discuss a planning tool that managers can use.