Tutorial (1)
Chapter 1: The Accountant’s Role in the Organization.
Question 1: True/False Questions
1: Managerial accounting is a branch of financial accounting and serves essentially the
same purposes as financial accounting.
False
2: Managerial accounting places greater emphasis on the future than financial accounting,
which is primarily concerned with the past.
True
3: Managerial accounting is not needed in a non-profit or governmental organization.
False
4: Management accounting information focuses on external reporting.
False
5: The balance sheet, income statement, and statement of cash flows are used for
financial accounting, but not for management accounting.
False
6: Cost accounting measures and reports short-term, long-term, financial, and
nonfinancial information.
True
7: The value chain describes the flow of goods, services, and information from the initial
sources of materials and services to the delivery of products to consumers.
True
8: Distribution refers to promoting and selling products or services to customers or
prospective customers.
False
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9: The production component of the value chain refers to acquiring, coordinating, and
assembling resources to produce a product or deliver a service.
True
10: Financial accounting reports financial and nonfinancial information that helps
managers implement company strategies.
False
Question Two: Multiple Choice Questions
1. Management accounting focuses primarily on providing data for:
A) internal uses by managers.
B) external uses by stockholders and creditors.
C) external uses by the Internal Revenue Service.
D) external uses by the Securities and Exchange Commission.
2. Managerial accounting:
A) is more future oriented than financial accounting.
B) tends to summarize information more than financial accounting
C) is primarily concerned with providing information to external users.
D) is more concerned with precision than timeliness.
3. Compared to financial accounting, managerial accounting places more emphasis on:
A) the flexibility of information.
B) the precision of information.
C) the timeliness of information.
D) both A and C above.
4: Management accounting:
a. focuses on estimating future revenues, costs, and other measures to forecast
activities and their results
b. provides information about the company as a whole
c. reports information that has occurred in the past that is verifiable and reliable
d. provides information that is generally available only on a quarterly or annual
basis
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5: Financial accounting:
a. focuses on the future and includes activities such as preparing next year's
operating budget
b. must comply with GAAP (generally accepted accounting principles)
c. reports include detailed information on the various operating segments of the
business such as product lines or departments
d. is prepared for the use of department heads and other employees
6: The person MOST likely to use ONLY financial accounting information is a:
a. factory shift supervisor
b. vice president of operations
c. current shareholder
d. department manager
7: The person MOST likely to use management accounting information is a(n):
a. banker evaluating a credit application
b. shareholder evaluating a stock investment
c. governmental taxing authority
d. assembly department supervisor
8. Which of the following descriptors refers to management accounting information?
a. It is verifiable and reliable.
b. It is driven by rules.
c. It is prepared for shareholders.
d. It provides reasonable and timely estimates.
9: Which of the following statements refers to management accounting information?
a. There are no regulations governing the reports.
b. The reports are generally delayed and historical.
c. The audience tends to be stockholders, creditors, and tax authorities.
d. It primarily measures and records business transactions.
10: Cost accounting:
a. provides information on the efficiency of factory labor
b. provides information on the cost of servicing commercial customers
c. provides information on the performance of an operating division
d. All of these answers are correct.
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Question Three:
Classify each cost item of Ripon Printers into one of the business functions of the value
chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6)
customer service.
Item:
a. cost of paper used in manufacture of books - production
b. cost of paper used in packing cartons to ship books - distribution
c. cost of paper used in display at national trade show - marketing
d. depreciation of trucks used to transport books to college bookstores
- distribution
e. cost of the wood used to manufacture paper - production
f. salary of the scientists attempting to find another source of printing ink - R&D
g. cost of defining the book size so that a standard-sized box is filled to capacity
- design