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1) Management accounting:
A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B) provides information about the company as a whole
C) reports information that has occurred in the past that is verifiable and reliable
D) provides information that is generally available only on a quarterly or annual basis

2) Managers use management accounting information to ________ strategy. A) choose
B) communicate
C) implement
D) All of these answers are correct.

3) Financial accounting:
A) focuses on the future and includes activities such as preparing next year's operating budget
B) must comply with GAAP (generally accepted accounting principles)
C) reports include detailed information on the various operating segments of the business such as product lines or departments
D) is prepared for the use of department heads and other employees

4) The person most likely to use ONLY financial accounting information is a: A) factory shift supervisor
B) vice president of operations
C) current shareholder
D) department manager

5) Which of the following people is LEAST likely to use management accounting information?
A) the controller
B) a shareholder evaluating a stock investment
C) the treasurer
D) an assembly department supervisor

6) Financial accounting provides the primary source of information for:
A) decision making in the finishing department
B) improving customer service
C) preparing the income statement for shareholders
D) planning next year's operating budget

7) Which of the following descriptors refers to management accounting information?
A) It is verifiable and reliable.
B) It is driven by rules.
C) It is prepared for shareholders.
D) It provides reasonable and timely estimates.

8) Which of the following statements refers to management accounting information?
A) There are no regulations governing the reports.
B) The reports are generally delayed and historical.
C) The audience tends to be stockholders, creditors, and tax authorities.
D) It primarily measures and records business transactions.

9) Which of the following groups would be LEAST likely to receive detailed management accounting reports?
A) stockholders
B) sales representatives
C) production supervisors
D) managers

10) Management accounting information includes:
A) tabulated results of customer satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
D) All of these answers are correct.

11) Cost accounting:
A) provides information on the efficiency of factory labor
B) provides information on the cost of servicing commercial customers
C) provides information on the performance of an operating division
D) All of these answers are correct.

12) Which of the following types of information are used in management accounting? A) financial information
B) nonfinancial information
C) information focused on the long term
D) All of these answers are correct.

13) Modern cost accounting plays a role in: A) planning new products
B) evaluating operational processes
C) controlling costs
D) All of these answers are correct.

14) A data warehouse or infobarn:
A) is reserved for exclusive use by the CFO
B) is primarily used for financial reporting purposes
C) stores information used by different managers for multiple purposes
D) gathers only nonfinancial information

15) Cost accounting provides all of the following EXCEPT:
A) information for management accounting and financial accounting
B) pricing information from marketing studies
C) financial information regarding the cost of acquiring resources
D) nonfinancial information regarding the cost of operational efficiencies

16) Management accounting includes all of the following EXCEPT A) implementing strategies
B) developing budgets
C) preparing special studies and forecasts
D) preparing the statement of cash flows

17) Financial accounting is concerned primarily with:
A) external reporting to investors, creditors, and government authorities
B) cost planning and cost controls
C) profitability analysis
D) providing information for strategic and tactical decisions

18) Financial accounting provides a historical perspective, whereas management accounting emphasizes:
A) the future
B) past transactions
C) a current perspective
D) reports to shareholders

19) An Enterprise Resource Planning System can best be described as:
A) a collection of programs that use a variety of unconnected databases
B) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales
C) a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase
D) a sophisticated means of linking two or more companies to facilitate their planning processes

20) The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as:
A) value chain management
B) enterprise resource planning
C) cost management
D) customer value management

True or False

21) Management accounting information focuses on external reporting.

22) Cost management is narrowly focused on a continuous reduction of costs.

23) Managers always require the information in an accounting system to be presented in the same format.

24) Modern cost accounting takes the perspective that collecting cost information is a function of the management decisions being made.

25) The balance sheet, income statement, and statement of cash flows are used for financial accounting, and also for management accounting.

26) Financial accounting is broader in scope than management accounting.

27) Cost accounting measures and reports short-term, long-term, financial, and non financial information.

28) Cost management provides information that helps increase value for customers.

29) Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.

30) An ideal database should store information in a way that allows different managers to access the information they need.

31) An Enterprise Resource Planning (ERP) System is a single database that collects data and feeds into applications that support each of the company's business activities, such as purchases, production, distribution, and sales.

32) Cost accounting provides information only for management accounting purposes.

33) Cost management involves long-term and short-term decisions that attempt to increase value for customers and lower costs of products or services.

34) For each report listed below, identify whether the major purpose of the report is for (1) routine internal reporting, (2) nonroutine internal reporting, or for (3) external reporting to investors and other outside parties.
study detailing sale information of the top-ten selling products
weekly report of total sales generated by each store in the metropolitan area
annual Report sent to shareholders
monthly report comparing budgeted sales by store to actual sales

35) Describe management accounting and financial accounting.

36) Is financial accounting or management accounting more useful to an operations manager? Why?

37) Is it possible to have an active cost management program without an Enterprise Resource Planning (ERP) System?

38) What competitive advantage could a company obtain from a successful cost management program?

  • SubjectBusiness
  • TopicAccounting
  • Difficulty LevelCollege/University
  • Answer has attachmentsNo
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Rachel Saunders
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