Horngren’s Cost Accounting A Managerial Emphasis 17th Global Edition by Srikant M. Datar test bank

Answer:  TRUE
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
24) Management accounting ensures communication of an organization's financial position to investors, banks, and regulators.
Answer:  FALSE
Explanation:  Financial accounting, not management accounting, ensures communication of an organization's financial position to investors, banks, and regulators.
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
25) The balance sheet and income statement are primarily management accounting reports.
Answer:  FALSE
Explanation:  The balance sheet and income statement are primarily financial accounting reports produced for owners, investors, and other external parties that provide capital or regulate the business.
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
26) Financial accounting is broader in scope than management accounting in that financial accounting can include external reporting and reporting that helps managers plan and control operations.
Answer:  FALSE
Explanation:  Management accounting is broader in scope than financial accounting as it can encompass some GAAP issues such as inventory valuation and cost of goods sold and it also provides reporting to help managers make decisions and plan and control operations.
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
27) Cost accounting measures and reports short-term, long-term, financial, and non-financial information.
Answer:  TRUE
Diff: 2
Objective:  1
AACSB:  Analytical thinking
 
28) Cost accounting 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:  TRUE
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 

 
29) Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.
Answer:  FALSE
Explanation:  Internal measures and reports do not have to follow GAAP.  Usefulness and the cost/benefit approach are the guiding principles of management accounting.
Diff: 2
Objective:  1
AACSB:  Analytical thinking
 
30) For management accounting, internal measurement and reporting are based on cost-benefit analysis.
Answer:  TRUE
Diff: 2
Objective:  1
AACSB:  Analytical thinking
 
31) Management accounting report time spans can vary from one hour to many years, while financial accounting report time periods usually span a quarter or a year.
Answer:  TRUE
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
32) Financial accounting provides an organization's past-oriented information such as the previous years' financial statements.
Answer:  TRUE
Explanation:  Financial accounting provides an organization's past-oriented information such as the previous years' financial statements.
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 
33) Cost management not only helps reduce costs but also improve customer satisfaction and the quality of a firm's products.
Answer:  TRUE
Diff: 1
Objective:  1
AACSB:  Analytical thinking
 

 
34) For each report listed below, identify whether the major purpose of the report is for (1) routine internal reporting, (2) nonroutine internal reporting, or for (3) external reporting to investors and other outside parties.
 
Item:
a.    study detailing sale information of the top-ten selling products
b.    weekly report of total sales generated by each store in the metropolitan area
c.     annual Report sent to shareholders
d.    monthly report comparing budgeted sales by store to actual sales
Answer: 
a.    (2) nonroutine internal reporting
b.    (1) routine internal reporting
c.     (3) external reporting to investors and other outside parties
d.    (1) routine internal reporting
Diff: 3
Objective:  1
AACSB:  Application of knowledge
 
35) Describe management accounting and financial accounting.
Answer:  Management accounting provides information to internal decision makers of the business such as top executives, managers, sales representatives, and production supervisors. Its purpose is to help managers predict and evaluate future results. Reports are generated often and usually broken down into smaller reporting divisions such as department or product line. There are no rules to be complied with since these reports are for internal use only. Management accounting embraces more extensively such topics as the development and implementation of strategies and policies, budgeting, special studies and forecasts, influence on employee behavior, and nonfinancial as well as financial information.