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Managerial Cost Concepts Chapter 1

Financial Accounting
Primary users of reports –
Types of reports –
Frequency of reports-
Purpose of reports-
Content of reports-
Verification process-
External Users
Financial Statements
Quarterly/Annually
General-Purpose
Generally Accepted Accounting Principles
Annually Audit by Certified Public Accountant
Managerial Accounting
Primary users of reports-
Types of reports-
Frequency of reports-
Purpose of reports-

Content of reports-
Verifications process-

Internal users
Internal Reports
As Frequently as needed
Special-Purpose Information for Special Decisions
Relevance to Decisions
No Independent Audits
Managerial accounting reports focus on manufacturing and nonmanufacturing costs, but are also used in the budget process.
False
Financial accounting reports pertain to subunits of the business and are very detailed.
False
Managerial accounting reports must follow GAAP and are audited by CPAs.
False
Managers’ activities and responsibilities can be classified into three broad functions: planning, directing, and controlling.
True
Financial accounting focuses on providing information to internal users.
False
Staff positions are directly involved in the company’s primary revenue-generating activities.
False
Preparation of budgets is part of financial accounting.
False
Managerial accounting applies only to merchandising and manufacturing companies.
False
Both managerial accounting and financial accounting deal with many of the same economic events.
True
Managerial accounting reports are prepared only quarterly and annually.
False
Financial accounting reports are general-purpose reports.
True
Managerial accounting reports pertain to subunits of the business.
True
Managerial accounting reports must comply with generally accepted accounting principles.
False
The company treasurer reports directly to the vice president of operations.
False
Salaries for assembly line inspectors.
Direct Labor or Manufacturing Overhead
Insurance on factory machines.
Manufacturing Overhead
Property taxes on the factory building.
Manufacturing Overhead
Factory repairs.
Manufacturing Overhead
Upholstery used in manufacturing furniture.
Direct Materials
Wages paid to assembly line workers.
Direct Labor
Factory machinery depreciation.
Manufacturing Overhead
Glue, nails, paint, and other small parts used in production.
Manufacturing Overhead
Factory supervisors’ salaries.
Manufacturing Overhead
Wood used in manufacturing furniture
Direct Materials
Which of the following are considered to be management’s three broad functions?
Planning, directing, and controlling
Which of the following is considered part of the controlling process?
keeping the company’s activities on track
The management function that requires management to look ahead and establish objectives is
planning
The process of keeping the company’s activities on track is
controlling
Managerial accounting applies to each of the following types of businesses except
managerial accounting applies to all types of firms.
Managerial accounting information is generally prepared for
managers.
Managerial accounting information
pertains to subunits of the entity and may be very detailed.
The major reporting standard for presenting managerial accounting information is
relevance.
Which of the following is not an internal user?
Creditor
Planning is a function that involves
setting goals and objectives for an entity.
The managerial function of controlling
includes performance evaluation by management.
Which of the following is not a management function?
Constraining.
A manager that is establishing objectives is performing which management function?
Planning.
The management function that requires managers to look ahead and establish objectives is
planning.
In determining whether planned goals are being met, a manager is performing the function of
controlling
Which of the following is not a separate management function?
Decision-making
Directing includes
coordinating a company’s diverse activities and human resources to produce a smooth-running operation.
Financial and managerial accounting are similar in that both
deal with the economic events of an enterprise.
The function that pertains to keeping the activities of the enterprise on track is
controlling
General-purpose reports
Financial Accounting
Reports are used internally
Managerial accounting
Prepared in accordance with generally accepted accounting principles
Financial Accounting
Special purpose reports
Managerial Accounting
Limited to historical cost data
Financial Accounting
Reporting standard is relevance to the decision to be made
Managerial Accounting
Financial statements
Financial Accounting
Reports generally pertain to the business as a whole
Financial Accounting
Reports generally pertain to subunits
Managerial Accounting
Reports issued quarterly or annually
Financial Accounting
Financial accounting information is prepared mainly for Entry field with correct answer_______ users, while managerial accounting information is prepared primarily for_________ users.
external,
internal
hree broad managerial functions are: (1)_________,(2)__________, and (3)_________.
planning, directing and controlling.
The ________function is concerned with setting goals and objectives for the entity.
planning.
Exercising good judgment in performing the managerial functions and choosing among alternative courses of action is called
decision making

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