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RSITY OF CALIFORNIA DAVIS ARE 119 Exam 1 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers I) Management accounting A) provides information that i B) reports information that has C) provides information about the company as a the question. s generally available only on a quarterly or annual basis occurred in the past that is verifiable and reliable whole 2) Managers use management accounting information to A) ensure that financial statements 8) communicate a firms financial position to investors, banks, regulators,and other outside are consistent with the SEC rules 2) parties C) help extemal users such as investors, banks, regulators, and suppliers D) communicate, develop, and implement strategies E) focuses on estimating future revenues, costs, and other measures to forecast activities and their results 3) Financial accounting 3) A) is the process of measuring, analyzing, and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization B) focuses on the future and includes activities such as preparing next years operating budget C) must comply with GAAP (generally accepted accounting principles) D) is prepared for the use of department heads and other employees 4) Which of the following is true of a budgeting system? A) It is easy to measure the exact benefits of a budgeting system. B) It leads to operational inefficiency C) It compels managers to plan ahead. D) it increases agency costs. 5) 5) The primary user of management accounting information is a(n) A) a shareholder evaluating a stock investment 8) the controller C) bondholder D) external regulator 6) 5) Financial accounting provides a historical perspective, whereas management accounting B) reports to shareholders D) past transactions A) a current perspective C) the future 7) price, or offering a unique product or service priced lower than the competition. 8) Vhich of the following statements concerning an organizations strategy is true w one of two broad strategies: offering a quality product at a higth Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. A good strategy will always overcome poor implementation. Cost accountants formulate strategy in an organization since they have more inputs about osts
Management accounting _____ A) provides information that is generally available only on a quarterly or annual basis. B) reports information that has occurred in the past that is verifiable and reliable C) provides information about the company as a whole. Managers use management accounting information to _____ A) ensure that financial statements are consistent with the SEC rules B) communicate a firm’s financial position to investors, banks, regulators, and other outside parties. C) help external users such as investors, banks, regulators, and suppliers D) communicate, develop, and implement strategies E) focuses on estimating future revenues, costs, and other measures to forecast activities and their results Financial accounting _____ A) is the process of measuring, analyzing, and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization B) focuses on the future and includes activities such as preparing next year’s operating budget C) must comply with GAAP (generally accepted accounting principles) D) is prepared for the use of department heads and other employees Which of the following is true of a budgeting system? A) It is easy to measure the exact benefits of a budgeting system. B) It leads to operational inefficiency C) It compels managers to plan ahead. D) it increases agency costs. The primary user of management accounting information is a(n) _____ A) a shareholder evaluating a stock investment B) the controller C) bondholder D) external regulator Financial accounting provides a historical perspective, whereas management accounting emphasizes _____. A) a current perspective B) reports to shareholders C) the future D) past transactions Which of the following statements concerning an organization’s strategy is true? A) business usually follow one of two broad strategies: offering a quality product at a high price, or offering a unique product or service priced lower than the competition. B) Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. C) A good strategy will always overcome poor implementation. D) Cost accountants formulate strategy in an organization since they have more inputs about costs.
Expert Answer
1. The answer is option “b” – reports information that has occured in the past. This information is used to make future decisions. Focus is on estimating future revenues, costs, and other measures to forecast activities and their results.
2. The answer is option “d” – communicate, develop and implement strategies. Managers use management accounting information to develop strategies by combining financial information with non financial information data.
3. The answer is option “c” – must comply with GAAP. Financial accounting has to follow and adhere to the standards and procedures as set by GAAP.
4. The answer is option “c” – it compels managers to plan ahead. Managers are able to compare actual information with budgeted information and take required and appropriate corrective action.
5. The answer is option “a” – the controller. Controller is the chief accounting officer who reports and interprets financial data and impels management toward making informed decisions.
6. The answer is option “c” – the future. This is because the focus is on estimating future revenues, costs, and other measures to forecast activities and their results.
7. The answer is option “b” – strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. It also helps an organization develop sustainable competitive advantage.
