Test Bank for Horngren's Accounting, 13th Edition Managerial Chaptersby Tracie Miller-Nobles, Brenda Mattison Chapter 1-9 Chapter M: 1
Introduction to Managerial Accounting
Learning Objective M:1-1 1) Managerial accounting focuses on providing information for internal planning and control. Answer: TRUE Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1)
2) Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders. Answer: FALSE Explanation: The reverse is true. Financial accounting serves external stakeholder information needs while managerial accounting serves the needs of managers and internal staff. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1)
3) Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects. Answer: FALSE Explanation: Financial statements provide mostly historical information; relevant and faithfully representative information and focused on the past. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting PE Question Type: Concept H2: Why Is Managerial Accounting Important? (H1)
4) Managerial accounting reporting by a public firm is required to follow the rules of GAAP. Answer: FALSE Explanation: Managerial accounting information is not guided by GAAP but rather by the concept of usefulness to management for decision making purposes. Diff: 1 LO: M:1-1 AACSB: Application of knowledge AICPA Functional: Reporting
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