MS 01 Flashcards
Management Accounting vs. Financial Management
The main purpose of management accounting is to
a. Assess past performance
b. Project future transactions
c. Help managers make decisions
d. Help investors & creditors make decisions
c. Help managers make decisions
The person most likely to use management accounting information is a (n)
a. Shareholder evaluating a stock investment
b. Banker evaluating a credit application
c. Assembly department supervisor
d. Governmental taxing authority
c. Assembly department supervisor
The person most likely to use only financial accounting information is a
a. Vice president of operations
b. Factory shift supervisor
c. Department manager
d. Current shareholder
d. Current shareholder
Management accounting is similar to financial accounting in that
a. Both focus on the whole business rather business segments
b. Both classify reported information in the same way
c. Both are concerned with financial information only
d. Both deal with economic events
d. Both deal with economic events
Other terms: Both deal with business transaction
Determine the TRUE statement about managerial accounting.
a. It complies with GAAP to produce financial reports for external users
b. It tends to summarize information with precision more often than financial accounting
c. Reports are often based on estimates and are seldom useful for everything other than the purpose for which they are prepared
d. It specifically covers various cost accumulation procedures such as job order costing, process costing, standard costing, backflush costing and activity-based costing (ABC)
c. Reports are often based on estimates and are seldom useful for everything other than the purpose for which they are prepared
Which is the most accurate statement?
a. Financial accounting is a subset of cost accounting
b. Management accounting is a subset of cost accounting
c. Cost accounting is a subset of both management & financial accounting
d. Management accounting is a subset of both cost and financial accounting
c. Cost accounting is a subset of both management & financial accounting
Decision-making is required in which of the following management function(s)?
a. Planning
b. Planning and control
c. Planning and organizing
d. Planning, organizing and control
d. Planning, organizing and control
The management control process contains the following four sequential steps, including
A) Measuring actual performance
B) Establishing standards of performance
C) Implementing a program of corrective action
D) Comparing actual performance with standards
What is the proper sequence of these activities?
a. A, B, C, D
b. A, B, D, C
c. B, A, C, D
d. B, A, D, C
d. B, A, D, C
The controller primarily occupies a
a. Line position
b. Staff position
c. Non-supervisory rank-and-file position
d. Position with very little influence in management decision-making
b. Staff position
A staff position is
a. Superior to a line position
b. Not essential in a business organization
c. Directly responsible in attaining organizational objectives
d. Supportive in nature, providing service and assistance to other company segments
d. Supportive in nature, providing service and assistance to other company segments
Line management includes
a. Manufacturing managers
b. Management accounting managers
c. Human resource (HR) managers
d. Information technology (IT) managers
a. Manufacturing managers
B to C are STAFF managers
**Staff **management includes
a. Human resource (HR) managers
b. Manufacturing managers
c. Distribution managers
d. Purchasing managers
a. Human resource (HR) managers
B to C are LINE managers
CONTROLLERS are usually not concerned with
a. Government reporting
b. Tax administration
c. Investor relations
d. Data processing
c. Investor relations
TREASURERS are usually not concerned with
a. Tax planning
b. Short-term financing
c. Cash custody and banking
d. Credit extension and collection of bad debts
a. Tax planning
The controller’s responsibilities are primarily (I) _ in nature, while the treasurer’s responsibilities are
primarily related to (II) .
a. (I) Operational (II) Financial management
b. (I) Financial management (II) Accounting
c. (I) Accounting (II) Financial management
d. (I) Financial management (II) Operations
b. (I) Financial management (II) Accounting
Which of the following is not a function of financial management?
a. Financing
b. Internal control
c. Capital budgeting
d. Risk management
b. Internal control
Internal control are part of population management
The primary goal of financial management is to:
a. To minimize risks
b. To maximize profit
c. To maximize returns
d. To maximize shareholders’ wealth
d. To maximize shareholders’ wealth
Profit refers to its returns and accruals
Profit maximization is not the primary goal of financial management because it does not take into consideration the following:
a. Risk and EPS
b. Risk and cash flow
c. Cash flow and EPS
d. EPS and stock prices
b. Risk and cash flow
