question

Management accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers outside the business organization

answer

True

question

External users of accounting information have a financial interest in an entity but are not involved with the day-to-day operations of the enterprise.

answer

True

question

Management accountants primarily are concerned with developing information:

answer

Suited to the needs of decision makers within the organization

question

The accounting standards and concepts used in the preparation of financial statements are called

answer

Generally accepted accounting principles (GAAP).

question

In the phrase "generally accepted accounting principles," the words generally accepted mean that the principles:

answer

Are understood and observed by all the participants in the financial reporting process.

question

Generally accepted accounting principles are the "ground rules" used in the preparation of

answer

Financial statements.

question

Which of the following is generally not considered an external user of accounting information?

answer

Factory managers.

question

The tailoring of an accounting report to meet the needs of a specific decision maker is more characteristic of financial accounting reports than of management accounting reports

answer

false

question

Managerial accounting information is designed primarily to assist investors and creditors in deciding how to allocate scarce resources.

answer

false

question

The set of standards, assumptions, and concepts that form the "ground rules" for financial reporting in the United States is termed

answer

Generally accepted accounting principles.

question

The content of management accounting reports needs to be presented in conformity with generally accepted accounting principles

answer

false

question

It is the function of management accounting to perform the following activities, except:

answer

Audited financial statements.

question

All of the following are characteristics of management accounting, except:

answer

Information must be developed in conformity with generally accepted accounting principles or with income tax regulations.

question

Which of the following are not considered "external" users of financial statements?

answer

managers

question

Which of the following is not a user of internal accounting information?

answer

creditors

question

Financial statements are prepared:

answer

Primarily for the benefit of persons outside of the business organization.

question

Although accounting information is used by a wide variety of external parties, financial reporting is primarily directed toward the informational needs of:

answer

Investors and creditors

question

Investors are individuals and other enterprises that have provided equity to the reporting enterprise.

answer

true

question

strong internal control structure:

answer

Contributes to the accuracy and reliability of the accounting records.

question

The objectives of an accounting system include all of the following except:

answer

Dictate the specific types of business transactions that the enterprise may engage in.

question

Information is cost effective when:

answer

The value of the information exceeds the cost of producing it.

question

Overseeing a company's affairs to ensure that the company is managed with the best interest of shareholders in mind is called:

answer

Internal control.

question

The best definition of an accounting system is:

answer

The personnel, procedures, devices, and records used by an entity to develop accounting information and communicate this information to decision makers.

question

Management accounting information is oriented toward the future while financial accounting information is historical in nature.

answer

true

question

Public accounting is the segment of the profession where professionals offer audit, tax, and consulting services to clients.

answer

true

question

The field of accounting may best be described as:

answer

The art of interpreting, measuring, and describing economic activity.

question

The internal control structure of an organization has no relationship to the reliability of accounting information.

answer

false

question

The accounting systems of most business organizations:

answer

Are tailored to meet the organization's needs for accounting information and the resources available for operating the system

question

Which of the following is not a basic function of an accounting system?

answer

To ensure that a business organization will be managed profitably.

question

The basic purpose of an audit is to:

answer

Assure financial statements are in conformity with GAAP.

question

Generally accepted accounting principles:

answer

may change over time

question

One purpose of generally accepted accounting principles is to make accounting information prepared by different companies more comparable.

answer

True

question

Investors are individuals and other enterprises that have provided equity to the reporting enterprise

answer

true

question

An accounting practice can become a "generally accepted accounting principle" through widespread use, even if the practice is not mentioned in the official pronouncements of the accounting standard-setting organizations.

answer

true

question

Which of the following is not characteristic of financial accounting?

answer

The information is developed primarily by "private accountants" that is, accountants employed by business organizations

question

Return on investment is the same as return of investment.

answer

false

question

Which of the following is not an important factor in ensuring the integrity of accounting information?

answer

The cost of preparing the financial information.

question

The principal difference between management accounting and financial accounting is that financial accounting information is

answer

Intended primarily for use by decision makers outside the business organization.

question

Internal users of financial accounting information include all of the following except

answer

Chief Executive Officer.

question

Which of the following is a characteristic of financial accounting information?

answer

Its preparation requires judgment.

question

Which of the following does not describe accounting

answer

It is an end rather than a means to an end.

question

Which of the following is not an objective of generally accepted accounting principles?

answer

To minimize the amount of income taxes owed.

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