Title: Managerial Accounting in Business
Course: Question Banks

Q: Financial accounting focuses on recording:
- Transactions that are used for planning.
- Business planning ideas
- Transactions as they occur
A: Transactions as they occur

Q: Managerial accounting is used to:
- Create financial statements
- Prepare the annual tax return.
- Plan, control and make decisions
A: Plan, control and make decisions

Q: Deciding how much to charge for our product can be accomplished with:
- Financial accounting reports only.
- By reviewing the tax return.
- Managerial accounting systems
A: Managerial accounting systems

Q: The planning process for a company may include:
- Completing the tax return.
- Putting together an income statement to provide to the bank to obtain financing
- Creating a budget with various milestones
A: Creating a budget with various milestones

Q: In order to know if a department met cost goals, a manager would review:
- The budget prepared in the planning stage.
- The income statement prepared by the financial accounting department.
- The planning documents including a budget, along with the financial accounting information to compare the plan to actual
A: The planning documents including a budget, along with the financial accounting information to compare the plan to actual

Q: When beginning a new business, managers should always.
- Prepare a budget for the banks and regulatory agencies.
- Prepare an income statement, balance sheet and cash flow analysis
- Prepare a budget and then review it to make decisions as the business grows.
A: Prepare a budget and then review it to make decisions as the business grows.

Q: Working together is important as the financial accounting can offer:
- The tax information needed by the managerial accounting department.
- Planning documents to help the managerial team prepare financial statements.
- Information needed by the managerial accounting staff to make decisions based on actual data.
A: Information needed by the managerial accounting staff to make decisions based on actual data.

Q: Historical data is needed by the managerial team in order to:
- Complete the income statement, balance sheet and cash flow statement.
- Provide reporting for financing purposes.
- Plan, control and decide based on actual data.
A: Plan, control and decide based on actual data.

Q: Historical data is used to:
- Create budgets only.
- Create financial statements to be used only in house by managers.
- Create financial statements, including the income statement, balance sheet and cash flow statement as well as help with future budgeting and planning.
A: Create financial statements, including the income statement, balance sheet and cash flow statement as well as help with future budgeting and planning.

Q: Reviewing the planning documents from the managerial accounting department may help a CEO to:
- Prepare financial statements to obtain financing for a new manufacturing facility.
- Obtain the data necessary to work with new investors.
- Make decisions about certain product lines, by using the actual financial reports and comparing to the planning documents.
A: Make decisions about certain product lines, by using the actual financial reports and comparing to the planning documents.

Q: The marketing manager may use managerial accounting information to:
- Prepare a plan for manufacturing to fulfill the sales requirements.
- Determine if a component should be outsourced or made in house.
- Plan the next period advertising campaign.
A: Plan the next period advertising campaign.

Q: How many widgets need to be produced next quarter is an example of:
- The controlling aspect of managerial accounting.
- The decision making component of managerial accounting.
- The planning aspect of managerial accounting.
A: The planning aspect of managerial accounting.

Q: A quality U.S. made product, that may not be the least costly available is a strategy of:
- Walmart through operational excellence.
- Companies who wish to gain market share by taking production overseas.
- Trek Bicycles and many other companies who focus on meeting a customer need.
A: Trek Bicycles and many other companies who focus on meeting a customer need.

Q: Better Doughnut Company is hoping to take over the market on drive-up baked goods. They want to be faster and less expensive than any competition. Their strategy revolves around:
- Customer intimacy with a doughnut designed to meet the customer’s need.
- Product leadership with the best doughnut a customer has ever eaten.
- Operational excellence, as they are hoping to sell more at the lowest cost, regardless of quality.
A: Operational excellence, as they are hoping to sell more at the lowest cost, regardless of quality.

Q: The strategy of a company will determine:
- The lowest price they can charge for their product and still make a profit.
- The maximum number of products a company can produce and sell faster and cheaper than their competition.
- How planning, controlling and decision making is done in a company, based on the components of strategy that are important to the particular company.
A: How planning, controlling and decision making is done in a company, based on the components of strategy that are important to the particular company.

Q: Moving your production facilities from the U.S. to overseas may entail risks such as:
- Improved company morale due to lower overhead costs.
- A higher quality product with a lower price.
- Less stringent employment laws that do not fit your business culture.
A: Less stringent employment laws that do not fit your business culture.

Q: Quality issues could be a risk for a company if they choose to:
- Employ qualified staff at premium wages.
- Reduce transit time by having product manufactured in house, rather than outsourcing.
- Move production of a component from their own facility to an outside vendor.
A: Move production of a component from their own facility to an outside vendor.

Q: A non-monetary risk of lowering the quality of a component part to save money may be:
- Higher company morale due to improved company profitability.
- A gain in market share with the lower price.
- Lowered confidence and image of the organization, due to more product failures.
A: Lowered confidence and image of the organization, due to more product failures.

Q: Upper level management will help to foster:
- A culture of profit at all costs, since their goal is to keep investors happy.
- Socially responsible culture with a focus on values based leadership.
- The overall culture of a company by leading from their values and beliefs, which will trickle down through the entire company.
A: The overall culture of a company by leading from their values and beliefs, which will trickle down through the entire company.

Q: Ethics and integrity are important components for:
- Only financial accounting staff.
- Only the CEO and CFO of publicly traded companies.
- All people working in the financial services industry, including managerial accountants.
A: All people working in the financial services industry, including managerial accountants.

Q: A positive or negative philosophy at the highest levels of a company may:
- Not affect the morale of employees, since they don’t work closely together.
- Only have an effect on the employees if it is positive, as employees will each have their own moral and ethical compass.
- Cause the rest of the company to have a similar philosophy about the business.
A: Cause the rest of the company to have a similar philosophy about the business.