Chapter 1

Question 1

It focuses on reporting financial information external parties such as investors, government agencies , banks and supplies based on Generally Accepted Accounting Principle (GAAP)

Answer 1

Financial Accounting

Question 2

Financial accounting information affects manager’s ________ and ________ through _________.

Answer 2

Decision, Actions, Compensation

Question 3

It is the process of measuring, analyzing and reporting financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization.

Answer 3

Management Accounting

Question 4

Managers use management accounting information to;

Answer 4

1. develop, communicate, and implement strategies
2. coordinate product design , production and marketing decisions and evaluates a company’s performance.

Question 5

True/False
Management accounting information and reports do not have to follow set principles or rules.

Answer 5

True

Question 6

It provides information for both management accounting and financial accounting professionals.

Answer 6

Cost accounting

Question 7

It is the process of measuring, analyzing and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization.

Answer 7

Cost accounting

Question 8

It helps managers make decisions to fulfill an organizations goals.

Answer 8

Management Accounting (purpose of information)

Question 9

Primary Users of Management Accounting

Answer 9

Managers of the organization (internal users)

Question 10

Focus and Emphasis of Management Accounting

Answer 10

Future-oriented (budget for 2017 prepared in 2016)

Question 11

Rules of measurement and reporting of management accounting

Answer 11

internal measures and reports do not have to follow GAAP but are based on cost-benefit analysis.

Question 12

Time Span and type of reports of management accounting

Answer 12

varies from hourly information to 15 to 20 years, with financial nonfinancial reports on products department, territories and strategies.

Question 13

Behavioral implications of management accounting

Answer 13

Designed to influence the behavior of managers and other employees

Question 14

Purpose of information in financial accounting

Answer 14

Communicate an organization’s financial position to investors, banks, regulators and other outside parties.

Question 15

Primary users of Financial Accounting

Answer 15

External users such as investors, banks, regulators and suppliers

Question 16

Focus and emphasis of Financial accounting

Answer 16

Past-oriented (reports on 2016 performance prepared in 2017)

Question 17

Rules of measurement and reporting of financial accounting

Answer 17

Financial statements must be prepared in accordance with GAAP and be certified by external, independent auditors

Question 18

Time Span and Type of reports of financial accounting

Answer 18

annual and quarterly financial reports primarily on the company as a whole.

Question 19

Behavioral implications in financial accounting

Answer 19

primarily reports economic events but also influences behavior because manager’s compensation is often based on reported financial results.

Question 20

This describes the activities managers undertake to use resources in a way that increases a product’s value to customers and achieves an organization goals.

Answer 20

Cost Management

Question 21

True/False
Cost management is all about reducing cost.

Answer 21

False, it is not all about reducing cost

Question 22

It includes making decisions to incur additional cost with the goal of enhancing revenues and profits

Answer 22

Cost Management

Question 23

It helps managers to manage cost, but the information and accounting systems themselves are not cost management

Answer 23

Information from accounting systems