BA 314 MODULE 1 QUIZ

1. It is a field of accounting that provides financial information and nonfinancial information to

an organization’s managers and other internal decision makers.
a. Management accounting
b. Cost accounting
c. Bookkeeping
d. Financial accounting
Answer: A

2. Which of the following statements is correct?

a. The manager’s planning function involves setting of the organization’s
goals and identifying alternatives and selecting the alternative that best
furthers such goals set for the organization
b. Managers carry out their planning function by mobilizing the organization’s
resources and overseeing day-to-day operations
c. Managers carry out their decision making function by obtaining feedback to
ensure that the plans are being followed
d. The planning, controlling and decision making functions of a manager are kept
separate from such manager’s decision-making activities
Answer: A

3. Which of the following statements is false?

a. Management accounting is as concerned with providing information to
stockholders as it is with providing information to managers
b. Management accounting focuses more on the segments of an organization rather
than on the organization as a whole
c. Management accounting need not follow the Generally Accepted Accounting
Principles (GAAP)
d. Managerial accounting is not mandatory, i.e., not required by any external law or
regulation
Answer: A

4. In which of the following aspects of management accounting is similar to financial

accounting?
a. Reliance on the accounting database
b. Users of report
c. Emphasis between the past and future
d. Type of data provided to users
Answer: A
5. Financial and management accounting differ in a number of ways. In contrast to financial
accounting, management accounting:
a. Emphasizes relevance and flexibility rather than precision
 b. Focuses on providing data for external users
c. Is mandatory
d. Is governed by Generally Accepted Accounting Principles
Answer: A

6. Management accounting is used by a company’s management for a multitude of

purposes which are as follows, except
a. Marketing
b. Evaluation
c. Planning
d. Reporting
Answer: A

7. Management accounting differs from financial accounting in that financial accounting is

a. Concerned primarily with external financial reporting
b. Involved more heavily in decision analysis
c. Future oriented
d. Concerned with qualitative information
Answer: A

8. Which of the following is NOT a kind of plan under the planning function of management
a. Medium range plans
b. Long range plans
c. Budgets
d. Strategic plans
Answer: A

9. Controllers are ordinarily responsible for

a. Preparation of tax returns
b. Investor relations
c. Credit extensions and collection of bad debts
d. Short-term financing
Answer: A

10. The treasury function includes

a. Cash custody and banking
b. Provide economic assessment
c. Reporting to government
d. Financial reporting
Answer: A

11. Planning is a function that involves

a. Setting goals and objectives for an entity
b. Hiring the right person for a particular job
 c. Coordinating the accounting information system
d. Analyzing financial statements
Answer: A

12. Which of the following is NOT a management function?

a. Constraining
b. Decision making
c. Planning
d. Controlling
Answer: A

13. A manager that is establishing objectives is performing which management function?

a. Planning
b. Motivating
c. Directing
d. Decision making
Answer: A

14. Management accounting information is generally prepared for:

a. Managers
b. Shareholders
c. Lenders
d. Regulatory agencies
Answer: A

15. Which of the following is NOT an internal user of accounting information?

a. Creditor
b. Department Manager
c. Cost Accountant
d. Controller
Answer: A

16. Internal reports must be prepared

a. As needed
b. Daily
c. Monthly
d. Annually
Answer: A

17. Management accounting information includes

a. The percentage units produced that are defective
b. Summary list of sales and purchases
c. Notes to the financial statements
d. Statement of management responsibility
 Answer: A

18. Control includes

a. Evaluating performance
b. Communicating company’s goals to employees
c. Manufacturing a component in house
d. Preparing projected statement of financial position
Answer: A

19. Responsibilities of a CFO include include all except

a. Investing in new equipment
b. Providing financial reports to stockholders
c. Managing short term and long term financing
d. Preparing tax returns
Answer: A

20. Management accounting is considered successful when it

a. Helps managers improve their decisions
b. Helps creditors evaluate the company’s performance
c. Is accurate
d. Is relevant and reported annually
Answer: A

21. Corporate social responsibility is

a. The duty to embrace service to the public interest
b. Effectively enforced through the controls envisioned by classical economics
c. The obligation to shareholders to earn a profit
d. The obligation to serve long term, organizational interests
Answer: A

22. Which of the following is NOT an internal control procedure of an accounting information
system?
a. Protection of assets
b. Periodic trial balances
c. Limits of authority
d. Separation of duties
Answer: A

23. Which of the following is independent of the company and conducts audits, reviews and
other procedures for the client
a. External auditor
b. Internal auditor
c. Forensic auditor
d. Government auditor
 Answer: A
24. Management accounting information
a. Pertains to subunits of the entity and may be very detailed
b. Pertains to the entity as a whole and is highly aggregated
c. Is prepared only once a year
d. Is constrained by requirements of GAAP
Answer: A

25. Which of the following is NOT a scope of management accounting

a. System access control
b. Taxation
c. Performance evaluation
d. Internal financial control
Answer: A

26. The person MOST likely to use management accounting information is a(n)
a. Assembly department supervisor
b. Banker evaluating a credit application
c. Shareholder evaluating a stock investment
d. Governmental taxing authority
Answer: A

27. The function of the controller wherein he/she compares performance with budgets and
standards and reports and analyzes outcomes of operations to the relevant departments
a. Reporting and interpreting
b. Economic appraisal
c. Planning for control
d. Evaluating and consulting
Answer: A

28. Financial accounting provides a historical perspective, whereas management accounting

emphasizes:
a. The future
b. Past transactions
c. Current perspective
d. Reports to shareholders
Answer: A

29. Management accountants would NOT

a. Prepare reports primarily for external users
b. Assist in budget planning
c. Determine cost behavior
d. Be concerned with the impact of cost and volume on profits
Answer: A
30. Financial statements for external users can be described as
a. General purpose
b. User-specific
c. Special purpose
d. Management reports
Answer: A