Chapter M1 Accounting

25 Questions

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Accounting Quizzes & Trivia

Questions and Answers
  • 1. 
    Traditionally, financial accounting information has focused primarily on:
    • A. 

      Productivity

    • B. 

      Efficiency

    • C. 

      Product and service quality

    • D. 

      Profitability

  • 2. 
    To create real value for customers and shareholders, a company must:
    • A. 

      Use sound financial accounting techniques

    • B. 

      Create profit over a five-year period

    • C. 

      Create value for its employees

    • D. 

      None of these answers is correct.

  • 3. 
    Because management accounting information is prepared for use by those working within the company, its users can question:
    • A. 

      The content of the information

    • B. 

      The level of detail and validity of the information

    • C. 

      The meaning of the information

    • D. 

      All of these answers are correct.

  • 4. 
    The public at large would use:
    • A. 

      Specific information about a division of the company

    • B. 

      Specific information about a product line

    • C. 

      Management accounting information

    • D. 

      General purpose financial statements

  • 5. 
    The transition of the United States from an agricultural-based economy to a manufacturing-based economy is known as the dawn of:
    • A. 

      Scientific management

    • B. 

      The Institute of Management Accountants

    • C. 

      Permanent employees

    • D. 

      The Industrial Revolution

  • 6. 
    According to the text, in the 100 years between 1825 and 1925, how many significant changes altered the nature of management accounting?
    • A. 

      One

    • B. 

      Two

    • C. 

      Three

    • D. 

      Four

  • 7. 
    The person responsible for preparing accounting reports for both internal and external decision makers is the:
    • A. 

      Controller

    • B. 

      Treasurer

    • C. 

      Both A and B are correct

    • D. 

      None of the answers is correct.

  • 8. 
    “The process of identifying, measuring, and communicating financial information to managers” is a formal definition of:
    • A. 

      Income tax accounting

    • B. 

      Cost accounting

    • C. 

      Managerial accounting

    • D. 

      Financial accounting

  • 9. 
    Management accounting information for a particular company would be the most useful to:
    • A. 

      Lending institutions that have a relationship with the company

    • B. 

      Production managers employed by the company

    • C. 

      Bondholders

    • D. 

      Stockholders

  • 10. 
    Financial accounting information should have:
    • A. 

      Predictive value

    • B. 

      A schedule estimating future revenues and costs of the company

    • C. 

      A forward-looking orientation

    • D. 

      A schedule of income and expenses by product line

  • 11. 
    Financial accounting information is prepared:
    • A. 

      For internal parties

    • B. 

      On forecast information

    • C. 

      For the firm as a whole

    • D. 

      Using firm's best estimates

  • 12. 
    A significant difference between financial and management accounting information is that:
    • A. 

      No rules apply to financial accounting

    • B. 

      Management accounting information must conform with GAAP

    • C. 

      Users can define the format of financial accounting information

    • D. 

      Financial accounting information must conform with GAAP

  • 13. 
    The financial information that presents information about various parts of a company is called:
    • A. 

      Financial accounting information

    • B. 

      None of these answers is correct.

    • C. 

      Management accounting information

    • D. 

      Public accounting information

  • 14. 
    An example of an internal user of accounting information is a(n):
    • A. 

      Supplier

    • B. 

      Competitor

    • C. 

      Bondholder

    • D. 

      Company engineer

  • 15. 
    Traditionally, management accounting information has focused promarily on:
    • A. 

      Profitability

    • B. 

      Solvency

    • C. 

      Productivity

    • D. 

      Liquidity

  • 16. 
    Between 1825 and 1925 several significant changes took place in business operations and organizations.  The change which did not occur during this time period is:
    • A. 

      The rise of independent contractors

    • B. 

      The rise in permanent employees

    • C. 

      The Industrial Revolution

    • D. 

      Diversification

  • 17. 
    Another term used to describe the controller of a company is:
    • A. 

      Bookkeeper

    • B. 

      Accounting clerk

    • C. 

      Chief accountant

    • D. 

      Treasurer

  • 18. 
    One characteristic that is unique to financial accounting is that it:
    • A. 

      Focuses on the future

    • B. 

      Has few rules

    • C. 

      Is presented by product line

    • D. 

      Is governed by GAAP

  • 19. 
    Another term for "management accounting" that means exactly the same thing is:
    • A. 

      Managerial accounting

    • B. 

      Income tax accounting

    • C. 

      Auditing

    • D. 

      Cost accounting

  • 20. 
    Companies began to diversify:
    • A. 

      During the last decade of the nineteenth century

    • B. 

      During the 1960s

    • C. 

      During the first two decades of the twentieth century

    • D. 

      Immediately after World War II

  • 21. 
    One criterion of financial accounting information is that it must:
    • A. 

      Contain only future data

    • B. 

      Deal with individual divisions

    • C. 

      Be available as users need it

    • D. 

      Be prepared according to GAAP

  • 22. 
    An example of an external user of financial information is a:
    • A. 

      Firm's president

    • B. 

      Marketing manager

    • C. 

      Sales person

    • D. 

      Stockholder

  • 23. 
    Which of the following users below would not typically use management accounting information?
    • A. 

      Stockholders

    • B. 

      Marketing managers

    • C. 

      Production supervisors

    • D. 

      Salespersons

  • 24. 
    The branch of accouting that provides information fir the firm's internal decision makers is:
    • A. 

      Tax accounting

    • B. 

      Liquidation accounting

    • C. 

      Financial accounting

    • D. 

      Management accounting

  • 25. 
    Accounting information which addresses specific company issues is known as:
    • A. 

      Financial accounting information

    • B. 

      Management accounting information

    • C. 

      Information prepared according to GAAP

    • D. 

      General-purpose information