Deck 1: Introduction to Managerial Accounting

Question 1

Which of the following is not one of the primary responsibilities of management?

A)Adhering to GAAP
B)Planning
C)Directing
D)Controlling

Answer 1

A

Question 2

Evaluating operations by comparing actual results to budgeted results is a part of the controlling responsibility of management.

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

Which of the following is being fulfilled when management compares the budget to actual results?

A)Directing
B)Planning
C)Adjusting
D)Controlling

Question 6

Budgets are the quantitative expression of management's plans.

Question 7

When management uses feedback to take corrective action on the budgets, which of the following management responsibilities are being fulfilled?

A)Controlling
B)Adjusting
C)Directing
D)Planning

Question 8

Budgeting is the process of evaluating the results of business operations against a plan and then making adjustments to that plan.

Question 9

________ gathers, summarizes, and reports on the financial impact of changes to business operations.

A)Managerial accounting
B)Planning
C)Directing
D)Controlling

Question 10

Managerial accounting develops reports that help internal parties effectively and efficiently run the company.

Question 11

The purpose of managerial accounting is to gather, summarize, and report the cost and revenue data relevant to each decision that is made.

Question 12

When management analyzes whether to move production to another country or to keep the production located where it currently is, which of the following management responsibilities is being performed?

A)Adjusting
B)Controlling
C)Planning
D)Directing

Question 13

Planning, directing, and controlling are a manager's three primary responsibilities.

Question 14

Using product cost information to determine sales prices is an example of

A)directing and planning.
B)directing and controlling.
C)controlling, directing, and planning.
D)controlling and planning.

Question 15

When management reviews hourly sales reports to determine the level of staffing needed to service customers, which of management's three primary responsibilities is fulfilled?

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

Question 16

Comparing actual results to budgets is an example of which of the following management functions?

A)Analyzing
B)Planning
C)Controlling
D)Directing

Question 17

Creating budgets are part of which primary management responsibility?

A)Controlling
B)Planning
C)Managerial accounting
D)Directing

Question 18

Which one of the following items is not one of the three primary manager responsibilities?

A)Controlling
B)Planning
C)Feedback
D)Adjusting

Question 19

Planning involves which of the following activities?

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

Question 20

Budgets are a way for managers to communicate their

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

Question 21

What are the three primary responsibilities of managers as described in the chapter? Give an example of each type of responsibility.

Question 22

Preparing budgets is an example of which of the following management functions?

A)Planning
B)Directing
C)Analyzing
D)Controlling

Question 23

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

Question 24

The SEC requires that reports generated by the managerial accounting system must be audited by an independent certified public accountant (CPA).

Question 25

Which of the following people is most likely to only use financial accounting information?

A)Vice president of plant operations
B)Product manager
C)Plant manager
D)Bank loan officer

Question 26

How often should managerial accounting reports be prepared?

A)Annually
B)Quarterly
C)Monthly
D)As often as necessary

Question 27

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

Question 28

Evaluating results against the plan is an example of which of the following management functions?

A)Planning
B)Controlling
C)Analyzing
D)Directing

Question 29

Overseeing the day-to-day operations of a company is an example of which of the following management functions?

A)Directing
B)Planning
C)Analyzing
D)Controlling

Question 30

GAAP must be followed when preparing managerial accounting reports.

Question 31

Managerial accounting information emphasizes relevance over reliability and objectivity.

Question 32

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

Question 33

The focus of management accounting is on

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

Question 34

Which of the following statements is true regarding managerial accounting information?

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

Question 35

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

Question 36

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

Question 37

What is one constraint placed on the information provided by a managerial accounting system?

A)Generally Accepted Accounting Principles (GAAP)
B)SEC Regulations
C)Cost - Benefit
D)International Financial Reporting Standards (IFRS)

Question 38

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

Question 39

Internal users such as managers are the primary users of managerial accounting information.

Question 40

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

Question 41

The primary goal of managerial accounting is to provide information to

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

Question 42

Which one of the following reports is most likely to be required to be audited by an outside entity?

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

Question 43

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

Question 44

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

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

Question 45

External parties receive information about past performance from

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

Question 46

Internal parties receive information about past performance from

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

Question 47

Which of the following statements is false?

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

Question 48

Management accountants rarely interact with employees from other business functions such as marketing and customer service.

Question 49

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

Question 50

Which of the following groups are external users of financial information?

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

Question 51

A company's budget information is most likely to be used by which of the following groups?

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

Question 52

The primary goal of financial accounting is to provide information for

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

Question 53

________ are owners of a company.

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

Question 54

Which statement is true?

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

Question 55

Which of following statements is true?

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

Question 56

Which of the following persons or groups would be least likely to receive detailed managerial accounting reports?

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

Question 57

Which of the following statements is true?

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

Question 58

________ is designed to meet the needs of internal decision makers.

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

Question 59

Managerial accounting would use which of the following types of information?

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

Question 60

________ are a company's decision makers.

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

Question 61

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

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

Question 62

Despite the proliferation of technology, managerial accountants are still needed to provide professional judgment in which of the following areas?

A)Recording non-routine transactions
B)Adjusting the financial records
C)Designing computer information systems
D)All of the about activities require professional judgment

Question 63

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

Question 64

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

Question 65

Which of the following positions typically manages the daily operations of a company?

A)The controller
B)The CEO
C)The board of directors
D)The stockholders

Question 66

The IMA issues which of the following certifications?

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

Question 67

To whom would the vice-president of operations typically directly report?

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

Question 68

The internal audit department reports directly to the audit committee, a subcommittee of the board of directors.

Question 69

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

Question 70

Which of the following positions is primarily responsible for raising capital and investing funds?

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

Question 71

Managerial accountants no longer perform routine mechanical accounting tasks in most companies.

Question 72

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

Question 73

The CFO is the person responsible for the day-to-day operations of the company.

Question 74

A CFO would have all of the following responsibilities except

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

Question 75

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 76

Oversight and strategy formulation and guidance for a large corporation are typically provided by which of the following positions?

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

Question 77

The treasurer and the controller report directly to the CFO.

Question 78

Which of the following positions report to the audit committee of the Board of Directors?

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

Question 79

What position is typically responsible for financial accounting, managerial accounting, and tax reporting?

A)Controller
B)Treasurer
C)CFO
D)Audit committee

Question 80

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