Financial Accounting for Managers
Exam Practice Tests
Course Introduction
Financial Accounting for Managers provides an in-depth introduction to the principles and practices of financial accounting with a managerial focus. The course explores the preparation, analysis, and interpretation of financial statements, enabling managers to make informed decisions based on accounting data. Key topics include the accounting cycle, revenue recognition, asset and liability measurement, and equity accounting, as well as the application of accounting standards and regulatory frameworks. Emphasis is placed on understanding how financial information influences planning, control, and decision-making processes within organizations, equipping students with the skills necessary to interpret financial reports and communicate financial insights effectively.
Recommended Textbook Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by Maryanne M.
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2443 Verified Questions
2443 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Management accounting information is only used by manufacturing organizations.
A)True
B)False
Answer: False
Q2) The primary objective of managerial accounting is:
A) to produce information for external users, including investors, creditors, customers, suppliers, and government agencies.
B) to produce financial information that must comply with various accounting standards.
C) to provide management with financial and nonfinancial information useful in planning, controlling, and decision making.
D) to provide the Internal Revenue Service with financial and nonfinancial information about the taxable income of an organization.
Answer: C
Q3) _____________________________ is the continual search for ways to increase the overall efficiency and productivity of activities by reducing waste, increasing quality and managing costs.
Answer: Continuous improvement
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3
Chapter 2: Basic Managerial Accounting Concepts
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216 Flashcards
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Sample Questions
Q1) (direct materials + direct labor)/units produced
A)per-unit prime cost
B)per-unit conversion cost
C)per-unit cost of goods manufactured
Answer: A
Q2) Non-manufacturing costs include
A) marketing and administration.
B) direct materials.
C) indirect materials.
D) overhead.
Answer: A
Q3) Period costs
A) are selling costs and administrative costs.
B) are used to compute product cost.
C) can be included in overhead costs.
D) are carried in inventory until the goods are sold.
Answer: A
Q4) Expired costs are called ____________.
Answer: expenses
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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261 Verified Questions
261 Flashcards
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Sample Questions
Q1) Direct labor for units sold
A)Variable costing income statement
B)Absorption costing income statement
C)Both types of income statements
Answer: C
Q2) What is the income for Sanders using the variable costing method?
A) $420,000
B) $480,000
C) $520,000
D) $500,000
Answer: A
Q3) The spreadsheet regression program supplies more than the estimates of the coefficients; it also provides information that can be used to see how ________ the cost equation is which is a feature not available for the high-low method.
Answer: reliable
Q4) cost of inspections
A)variable
B)fixed
Answer: A
Page 5
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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175 Flashcards
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Sample Questions
Q1) The cost of direct materials is assigned to a job by the use of a source document known as a _____.
A) time ticket
B) materials requisition form
C) schedule of cost of goods manufactured
D) sales receipt
E) All of these are correct.
Q2) A costing system in which costs are collected and assigned to units of production for each individual job
A)actual cost system
B)job-order costing system
C)normal cost system
D)process-costing system
Q3) In an actual cost system, it is difficult to determine the _____ per unit.
A) direct labor cost
B) overhead cost
C) cost of direct material consumed
D) All of these are correct.
E) None of these are correct.
Q4) Applied overhead costs are charged to ________________.
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Chapter 5: Activity-Based Costing and Management
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Sample Questions
Q1) The number of times an activity is performed.
A)activity analysis
B)value-added costs
C)velocity
D)activity inputs
E)activity output measure
F)activity output
Q2) One of the three major dimensions of measuring activity performance is quality.
A)True
B)False
Q3) Discretionary activities are necessary to comply with legal mandates.
A)True
B)False
Q4) _________________________ assigns costs to activities and then costs to cost objects.
Q5) Activity drivers should be classified as either unit-level or nonunit-level.
A)True
B)False
Q6) When a new product can be designed to use components already being used by other products this is known as ________________.
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Chapter 6: Process Costing
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Sample Questions
Q1) Which of the following methods uses costs and work of beginning work in process?
A) weighted average method
B) FIFO method
C) sequential processing method
D) both the weighted average and FIFO methods
Q2) Process costing would be most appropriate for which of the following?
A) soft drink bottler
B) custom home builder
C) caterer
D) photocopy shop
Q3) Process costing is most appropriate for manufacturers of homogeneous products.
A)True
B)False
Q4) Costing system used by a tire manufacturer.
A)Process Costing
B)Job Order Costing
Q5) Process-costing systems are specifically designed to support costing of mass-produced homogeneous products.
A)True
B)False
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) What is the overall sales revenue at break-even?
A) $778,800
B) $387,200
C) $648,000
D) $550,000
E) $480,000
Q2) The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume.
A)break-even point
B)Common fixed expenses
C)Contribution margin
D)Direct fixed expenses
E)Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix
Q3) If variable expenses decrease and the price increases, the break-even point decreases.
A)True
B)False
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Chapter 8: Tactical Decision-Making and Relevant Costing
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Sample Questions
Q1) Constraints
A)the difference in total cost between the alternatives in a decision
B)determine whether or not a segment should be kept or dropped
C)limited resources and limited demand for each product
D)a specific set of procedures that produces a decision
E)the point at which products that have common processes and costs of production become distinguishable
F)method of determining the cost of a product based on the price that customers are willing to pay
G)decisions involving a choice between internal and external production
H)products that have common processes and costs of production up to a point
I)past costs that cannot be affected by future decisions
J)a percentage applied to the base cost to cover other costs plus profit
K)determine whether a specially priced order should be accepted or rejected
L)determine whether it is more profitable to process a joint product further
Q2) In deciding the optimal mix of products that use a constrained resource, it is important to determine the contribution margin per unit of scarce resource.
A)True
B)False
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Chapter 9: Profit Planning and Flexible Budgets
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Sample Questions
Q1) What are the expected cash receipts in December?
A) $225,200
B) $210,400
C) $50,000
D) $250,000
E) $179,000
Q2) What is Connor's expected sales revenue for February?
A) $2,020,000
B) $1,900,000
C) $60
D) $1,125,000
E) $2,220,000
Q3) The ending finished goods inventory budget supplies information needed for the A) sales budget.
B) cash budget.
C) budgeted income statement.
D) cost of goods sold budget.
E) all of these.
Q4) A _____________________ compares actual costs with budgeted costs.
Q5) A __________________ is a moving 12-month budget.
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Chapter 10: Standard Costing and Variance Analysis
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Sample Questions
Q1) In setting price standards for materials and labor,
A) the purchasing department must consider discounts, freight, and quality.
B) personnel must consider payroll taxes, fringe benefits, and qualifications.
C) it is the joint responsibility of operations, purchasing, personnel, and accounting.
D) All of these.
E) None of these.
Q2) During June, Zinc Company produced 10,000 chainsaw blades.The standard quantity of material allowed per unit was 2 pounds of steel per blade at a standard cost of $5 per pound.Zinc determined that it had a favorable materials usage variance of $1,500 for June.Calculate the actual quantity of materials used by Zinc Company in June.
A) 19,700 pounds
B) 13,305 pounds
C) 12,645 pounds
D) 17,425 pounds
Q3) The benefits of operational control under a standard cost system can extend to all manufacturing environments.
A)True
B)False
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Chapter 11: Performance Evaluation and Decentralization
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140 Flashcards
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Sample Questions
Q1) The selling division would never agree to a transfer price below its full manufacturing cost.
A)True
B)False
Q2) Using Economic Value Added (EVA) to calculate residual income, the cost of capital employed is
A) the standard percentage cost of capital multiplied by the average capital employed.
B) the actual percentage cost of capital multiplied by the average capital employed.
C) the standard percentage cost of capital multiplied by the total capital employed.
D) the actual percentage cost of capital multiplied by the total capital employed.
Q3) Decentralization usually is achieved by creating units called ___________.
Q4) The practice of delegating decision-making authority to lower levels of management in a company is called centralization.
A)True
B)False
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Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) The _____ method of capital investment decision making assumes that each cash inflow received is reinvested at the required rate of return.
A) net present value
B) average rate of return
C) payback period
D) ratio analysis
E) None of these
Q2) Tangarine Company is considering a project with an internal rate of return of 12%.Tangarine requires a minimum rate of return of 10%.The net present value of the project is:
A) negative.
B) infinite.
C) equal to zero.
D) positive.
E) None of these
Q3) When choosing among competing alternatives the ________________ model may choose an inferior project in terms of maximizing firm wealth.
Q4) The value of an investment at the end of its life is called its ________________.
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Page 14
Chapter 13:
Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting
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Sample Questions
Q1) A _________ is one that does not conform to quality specifications.
Q2) Which of the following is true of corporate sustainability reporting?
A) Corporate sustainability reporting is synonymous with traditional financial reporting.
B) Corporate sustainability reporting must adhere to generally accepted accounting principles.
C) Corporate sustainability reporting is required to have the report contents verified by an independent third party.
D) Corporate sustainability reporting is voluntary in nature.
Q3) Which of the following is true of external failure costs?
A) These are costs of preventing or detecting poor quality.
B) These are costs that can be most devastating of all the quality costs.
C) These costs are incurred to determine whether products and services are conforming to their requirements.
D) Examples of external failure costs are quality engineering, quality training programs, and quality planning.
Q4) _________ is measured as the benefit of risk response minus the cost of risk response. Page 15
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Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Proceeds from sale of equipment at book value.
A)Added to net income
B)Deducted from net income
C)Cash outflow--investing activity
D)Cash inflow--investing activity
E)Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity
Q2) Payment of Operating Expenses
A)Operating Activity, Source of Cash
B)Operating Activity, Use of Cash
C)Investing Activity, Source of Cash
D)Investing Activity, Use of Cash
E)Financing Activity, Source of Cash
F)Financing Activity, Use of Cash
G)Non-cash Investing & Financing Activity
Q3) Investments in stock are reported as an investing activity on the statement of cash flows.
A)True
B)False
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) Industrial statistics should be taken as absolute norms as far as standards for comparability.
A)True
B)False
Q2) Swanson Company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable.What effect did the borrowing transaction have on Swanson Company's current ratio?
A) The ratio remained unchanged.
B) The change in the current ratio cannot be determined.
C) The ratio decreased.
D) The ratio increased.
Q3) Last year, Amber Company's net sales was $800,000.The beginning accounts receivable balance was $20,000, and the ending accounts receivable balance was $30,000.The company's accounts receivable turnover ratio was closest to:
A) 32.
B) 11.
C) 24.
D) 46.
Q4) ______________ and ____________ are the two major sources of capital.
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