Question 1

The accountant for Myra Lido deliberately deferred cash payments for business expenses in order to record a higher operating cash flow for the company. As long as the amount was not material, this would not be considered unethical behavior.

Accepted Answer

Deliberately deferring expenses to record a higher operating cash flow is unethical behavior, regardless of the materiality of the amount. It violates the principle of accurately and honestly reporting financial information.

Question 2

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

Accepted Answer

This statement is false. Financial accounting provides reports for external stakeholders such as investors, creditors, and regulatory agencies, while managerial accounting provides information for internal decision-making purposes.

Question 3

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

Accepted Answer

Management accounting information is used by managers to make decisions and control their operations. It is not primarily intended for external stakeholders, does not require an external audit, and does not necessarily need to comply with GAAP.

Question 4

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 is a crucial step in controlling the operations of a company. The controlling function of managerial accounting involves monitoring the implementation of plans, evaluating actual performance against planned performance, and taking corrective action as needed. This helps to ensure that the company is operating efficiently and effectively and is on track to reach its goals.

Question 5

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 aspect of the planning function in managerial accounting.

Question 6

The IMA standards of ethical practice require managerial accountants to maintain their professional competence.

Accepted Answer

The IMA standards of ethical practice do require managerial accountants to maintain their professional competence, as stated in the first standard, which emphasizes the importance of competence in performing professional duties. This includes continuing education and staying up-to-date with relevant developments in the field.

Question 7

ERP systems can integrate all of a company's functions, departments, and data into a single system.

Accepted Answer

ERP systems are designed to integrate all of a company's functions, departments, and data into a single system, providing a unified view of the organization for decision-making and management purposes. This can include everything from finance and accounting to supply chain management, customer relationship management, and human resources. By consolidating data and processes into a single platform, ERP systems can improve efficiency, reduce costs, and enhance collaboration and communication across the organization.

Question 8

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

Accepted Answer

A budget is a management accounting tool used by organizations to plan and control their expenditure and revenue. It is a financial plan that sets out the expected income and expenses of an organization over a specific period.

Question 9

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 for creating a safe workplace where employees can perform their job duties without undue risks to their health and safety. Employee safety is a critical responsibility of management, and they must take measures to properly train employees on the safe operation of equipment, avoid unsafe working conditions, and mitigate hazards in the workplace. Providing a safe working environment is not only ethical but also a legal obligation of the management.

Question 10

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

Accepted Answer

The answer of Management accounting reporting by a public firm...

Question 11

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 12

Management of a company is accountable to ________ for obeying laws and paying taxes.
A) the natural environment
B) its asset vendors
C) the securities exchange
D) the government

Accepted Answer

The government is responsible for enforcing laws and collecting taxes. Therefore, a company's management is accountable to the government for obeying laws and paying taxes.

Question 13

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 an overview of the financial performance and position of a business to external stakeholders.

Question 14

The IMA Standards of Ethical Practice include confidentiality, competence, credibility, and integrity.

Accepted Answer

The IMA Standards of Ethical Practice do include confidentiality, competence, credibility, and integrity as four of the eight principles that members should adhere to.

Question 15

Management accounting information of 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

Management accounting information is used primarily by internal stakeholders such as employees to plan and control operations. The information provided by management accounting is used to make decisions related to budgeting, cost control, and performance evaluation. While customers, creditors, and investors may also use some management accounting information, their primary interest is in financial accounting information which is focused on the financial position and performance of the company as a whole.

Question 16

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

Accepted Answer

Managerial accounting is concerned with providing information internally to assist with planning, decision-making, and controlling the organization's operations. It focuses on analyzing and interpreting financial information to support management in making informed business decisions.

Question 17

In which of the following ways is the management of a company accountable to its communities?
A) making timely interest payments to creditors and dividend payments to investors
B) ensuring the company's environmental impact is not harmful to its area of operations
C) providing a capital return on the shareholders' investment
D) repaying principal and interest to the suppliers

Accepted Answer

The management of a company is accountable to its communities by ensuring that the company's environmental impact is not harmful to its area of operations. This includes adhering to environmental regulations and implementing sustainable practices that benefit the local community. While the other options may also be important for a company's accountability, they are primarily related to financial responsibilities and not community impact.

Question 18

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 is concerned with providing financial information to external parties, such as investors, creditors, and regulators, to assist them in making investment or credit decisions. It involves the preparation of financial statements that summarize a company's financial performance and position over a period of time. Option B is incorrect because financial accounting does not provide forward-looking information; it is historical in nature. Option C is also incorrect because financial accounting provides information about the financial performance and position of the whole company, not just parts of it. Option D is incorrect because financial accounting does not focus on planning and controlling day-to-day operations; that is the role of management accounting.

Question 19

Which of the following is an objective of management accounting?
A) to generate financial statements of a company 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 management accounting is to provide information to business managers to assist them in controlling their business. While financial statements are important for tax reporting and shareholder decisions, these are not the primary objectives of management accounting. GAAP compliance is important, but it is not unique to management accounting.

Question 20

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 that the suppliers and vendors are treated fairly and can continue to provide goods and services to the company. It also helps to maintain a good business relationship between the parties involved. While providing safe products, obeying laws and paying taxes timely, and providing a return on shareholders' investment are important responsibilities of management, they are not directly related to their accountability to suppliers and vendors.

Quiz 1: Introduction to Managerial Accounting

The accountant for Myra Lido deliberately deferred cash payments for business expenses in order to record a higher operating cash flow for the company. As long as the amount was not material, this would not be considered unethical behavior.

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

Which of the following statements is true of management accounting?

Comparing actual performance to previously budgeted amounts is part of the:

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

The IMA standards of ethical practice require managerial accountants to maintain their professional competence.

ERP systems can integrate all of a company's functions, departments, and data into a single system.

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

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

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

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

Management of a company is accountable to ________ for obeying laws and paying taxes.

Financial reporting is typically much more detailed than managerial accounting.

The IMA Standards of Ethical Practice include confidentiality, competence, credibility, and integrity.

Management accounting information of a company is primarily used by:

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

In which of the following ways is the management of a company accountable to its communities?

Which of the following statements is true of financial accounting?

Which of the following is an objective of management accounting?

Management's accountability to its suppliers and vendors is to: