1. Which phrase best describes the current role of the managerial accountant?
a. Managerial accountants prepare the financial statements for an organization.
b. Managerial accountants facilitate the decision-making process within an organization.
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c. Managerial accountants make the key decisions within an organization.
d. Managerial accountants are primarily information collectors.
e. Managerial Accountants are solely staff advisors in an organization.
Current roles of managerial accountant
- Stewardship Accounting– Management accountant typically designs financial accounts and the frame-work of cost and organizes reports for operational and routine decision-making.
- Short-term and long-term planning– Management accountant conducts a crucial function in projecting economic and future business occurrences for deriving prospect planning.
- Developing management information system- Reports for long-term decision making and the routine reports are typically forwarded to managerial accountant across all levels to consider corrective measure at the correct time.
2. The goal of managerial accounting is to provide the information that managers need for all of the following EXCEPT:
c. Decision Making
Explain other goals of managerial accounting
1. Coordinating Operations
Managerial accounting assist the administration in coordinating the operations of the concern by preparing functional financial plans in the first occasion followed by coordination of the whole operations of the concern by incorporating all functional financial plans into a master budget.
2. Motivating Workers
By establishing objectives, strategizing the economical and excellent course of action and then followed by performance measurements by management accountant enhances the efficiency of the firm and thus provide incentive to the affiliates of the firm.
Management accountant propose the utilization of budgeting, cost control methods, internal financial control, and responsible accounting. All of this requires comprehensive research of the structure of the firm. Thus, it assists to rationalize the structure of the firm.
4. Controlling performance
Management accounting provides the data in non-technical and an intelligible way. This will assist the administration in deducing other course of action present and directing the administration in considering information and obtaining the most appealing financial outcomes.
3. That kind of accounting concerned with providing information to management in making decisions about the operations of the business
a. Responsibility accounting
b. Management accounting
c. Cost accounting
d. Correct answer no given
Step by Step Explantion
Responsibility Accounting incorporates the separate reporting of costs and revenues for every accountability center in a firm.
Cost Accounting represents a form of managerial accounting whose objective is to capture the total production cost of a corporation by evaluating its fixed and variable costs.
4. Management Accounting
a. Is governed by generally accepted accounting principles.
b. Draws from disciplines other than accounting.
c. Is geared primarily to the past rather than the future.
d. Places more emphasis on precision of data compared with financial accounting which does snot.
5. Which of the following characteristics does not relate to management accounting?
a. Accounting reports may include non-monetary information
b. It is subject to restrictions imposed by GAAP.
c. Reports are often based on estimates and are seldom useful for anything other than the purpose
for which they are prepared.
d. It provides data for internal users within the business organization.
Other characteristics of Management Accounting
6. Management accounting is an integral part of the management process. As such, it provides essential information for the following objectives except
a. Maintaining the current level of resource utilization as well as internal and external
b. Measuring and evaluating performance.
c. Planning strategies and controlling current activities of the organization.
d. Enhancing objectivity in decision-making.
Other objectives Management accounting
- Enhanced decision making
- Controls management performance
- Motivates workers
- Assesses policies efficiency
- Interpret financial data
- Proper formulation and planning of policies
7. Which type of authority do management accountants generally exercise?
8. Which of the following is not a characteristic of a “Staff” authority?
a. It gives support, advise, and service to line managers.
b. It is exercised laterally or upward.
c. It has the authority to command action or give orders to subordinates.
d. None of the above
Other characteristic of a “Staff” authority
- Agency of control
- Agency of advice
- Agency of coordination
- Agency of service
9. In financial accounting, certain rules and regulations must be followed on how financial statements must be presented to the reader. In managerial accounting, no such restrictions generally apply because it is:
a. An entirely different field that need not observe the broad guidelines in financial accounting.
b. Designed to provide management with non-financial information for decision-making.
c. Designed to provide accounting and other financial data to assist management in making
d. A discipline that does not require preparation of other financial statements.
e. All of the above.
10. Which of the following characteristics relate to Financial Accounting?
a. Reports are promptly prepared and submitted to preserve its usefulness.
b. Data may be both historical and estimates.
c. It must adhere to the generally accepted accounting principles.
d. It provides information needed by management in making decisions.
Other characteristics of Financial Accounting
- Monetary transactions
- Historical in Nature
- Used externally
- Is bounded by legal prerequisites
11. The following characteristics refer to Financial Accounting except
a. Provides information to external users
b. Emphasizes on objective data
c. Has no externally imposed standards
d. Generates general purpose financial statements
12. To distinguish between management accounting and financial accounting, the following statements are correct, except
a. Management accounting, in view of its various integrated recipients should have a separate data recording and retrieval system from financial accounting.
b. Financial accounting is bound by GAAP, and management accounting need not be in conformity with GAAP.
c. Financial accounting can be regarded as the process while management accounting can be regarded as the product of the process.
d. Management accounting output must be released on time so as not to erode its usefulness; Financial accounting output can still be useful even when delayed.
What is Management Accounting and Financial Accounting
Management Accounting incorporates measurement, interpretation, identification, and analysis of accounting data to be utilized by managers in deriving informed institutional decisions. Financial Accounting, on the hand , incorporates a procedure of summarizing, reporting, and recording the innumerable of transactions originating from business activities over a particular time.
13. The process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals is called
A. managerial accounting
C. financial accounting
D. promotional activities
14. The primary objective of management accounting is
A. to provide stockholders and potential investors with useful information for decision making.
B. to provide banks and other creditors with information useful in making credit decisions.
C. to provide management with information useful for planning and control of operations.
D. to provide supervising government agencies with information about the company’s management affairs.
15. Management accounting information
A. uses historical cost as the basis for reports to managers who are making decisions about future
Courses of action.
B. should be developed and provided only if its benefits exceed its costs.
C. does not reflect the financial criteria of verifiability or consistency.
D. should serve the basic needs of investors and creditors.
16. Paying rent, purchasing supplies, and purchasing inventory are which of the day-to-day work activities of the management team?
A. decision making
B. directing operational activities
D. only A and B
17. Managerial accounting information:
A. pertains to the entity as a whole and is highly aggregated.
B. pertains to subunits of the entity and may be very detailed.
C. is prepared only once a year.
D. is constrained by the requirements of generally accepted accounting principles.
NB: Provide answer
18. Managerial accounting is primarily concerned with:
A. segments of a company rather than the company as a whole.
B. the data needs of stockholders and creditors.
C. meeting the requirements of generally accepted accounting principles.
D. the company as a whole rather than a segment of the organization.
NB: Provide answer
19. The major reporting standard for presenting managerial accounting information is
B. generally accepted accounting principles
C. the cost principle
D. the current tax law
20. Managerial accounting differs from financial accounting in that it is
A. more concerned with segments of a company.
B. less constrained by rules and regulations.
C. more concerned with the future.
D. all of the above.