1
Financial statements are prepared:
A)
Only for publicly owned business organizations.
B)
For corporations, but not for sole proprietorships or partnerships.
C)
Primarily for the benefit of persons outside of the business organization.
D)
In either monetary or nonmonetary terms, depending upon the need of the decision maker.
2
The basic purpose of an accounting system is to:
A)
Develop financial statements in conformity with generally accepted accounting principles.
B)
Provide as much useful information to decision makers as possible, regardless of cost.
C)
Record changes in the financial position of an organization by applying the concepts of double-entry accounting.
D)
Meet an organization's need for accounting information as efficiently as possible.
3
Information is cost effective when:
A)
The information aids management in controlling costs.
B)
The information is based upon historical costs, rather than upon estimated market values.
C)
The value of the information exceeds the cost of producing it.
D)
The information is generated by a computer-based accounting system.
4
Although accounting information is used by a wide variety of external parties, financial reporting is primarily directed toward the information needs of:
A)
Investors and creditors..
B)
Government agencies such as the Internal Revenue Service.
C)
Customers.
D)
Trade associations and labor unions.
5
A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the following, except:
A)
Balance sheet as of December 31, 1999.
B)
Income statement for the year ended December 31, 1999.
C)
Statement of projected cash flows for 2000.
D)
Notes containing additional information that is useful in interpreting the financial statements.
6
All of the following are characteristics of managerial accounting, except:
A)
Reports are used primarily by insiders rather than by persons outside of the business entity.
B)
Its purpose is to assist managers in planning and controlling business operations.
C)
Information must be developed in conformity with generally accepted accounting principles or with income tax regulations.
D)
Information may be tailored to assist in specific managerial decisions.
7
In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is more likely to:
A)
Be used by decision makers outside of the business organization.
B)
Focus upon the operation results of the most recently completed accounting period.
C)
View the entire organization as the reporting entity.
D)
Be tailored to the specific needs of an individual decision maker.
Which of the following declaration about difference between financial and management accounting is incorrect?
Financial accounting is based on generally accepted accounting practices; management accounting faces no similar constraining factors. Answer» b.
Which of the following declaration about differences between financial and managerial accounting is correct?
d) Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors.
Which of the following is a difference between financial accounting and managerial accounting?
Managerial accounting focuses on an organization's internal financial processes, while financial accounting focuses on an organization's external financial processes. Managerial accountants focus on short-term growth strategies relating to economic maintenance.
Which of the following statements indicate distinctive features of management accounting as compared to financial accounting?
The first difference is that management accounting is presented to a company's internal community, while financial accounting is prepared for an external audience.