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Financial and Management Accounting: Multiple Choice Questions and Answers, Quizzes of Financial Accounting

Duy Tan UniversityFinancial Accounting

A series of multiple-choice questions and answers covering key concepts in financial and management accounting. It explores the differences between these two branches of accounting, focusing on their purposes, reporting standards, and cost categorization. The document also delves into cost-volume-profit (cvp) analysis, budgeting, and the master budget, providing insights into these essential management accounting tools.

Typology: Quizzes

2022/2023

Uploaded on 02/03/2025

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1. One major difference between financial and management accounting is that
A. financial accounting reports are prepared primarily for users external to the company.
B. management accounting is not under the jurisdiction of the Securities and Exchange
Commission.
C. government regulations do not apply to management accounting.
D. all of the above are true
2. Financial accounting and cost accounting are both highly concerned with
A. preparing budgets.
B. determining product cost.
C. providing managers with information necessary for control purposes.
D. determining performance standards.
3. Which of the following statements is true?
A. Management accounting is a subset of cost accounting.
B. Cost accounting is a subset of both management and financial accounting.
C. Management accounting is a subset of both cost and financial accounting.
D. Financial accounting is a subset of cost accounting.
4. Financial accounting
A. is primarily concerned with internal reporting.
B. is more concerned with verifiable, historical information than is cost accounting.
C. focuses on the parts of the organization rather than the whole.
D. is specifically directed at management decision-making needs.
5. In comparing financial and management accounting, which of the following more
accurately describes management accounting information?
A. historical, precise, useful
B. required, estimated, internal
C. budgeted, informative, adaptable
D. comparable, verifiable, monetary
6. Which of the following statements about management or financial accounting is false?
A. Financial accounting must follow GAAP.
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1. One major difference between financial and management accounting is that A. financial accounting reports are prepared primarily for users external to the company. B. management accounting is not under the jurisdiction of the Securities and Exchange Commission. C. government regulations do not apply to management accounting. **D. all of the above are true

  1. Financial accounting and cost accounting are both highly concerned with** A. preparing budgets. B. determining product cost. C. providing managers with information necessary for control purposes. D. determining performance standards. 3. Which of the following statements is true? A. Management accounting is a subset of cost accounting. B. Cost accounting is a subset of both management and financial accounting. C. Management accounting is a subset of both cost and financial accounting. D. Financial accounting is a subset of cost accounting. 4. Financial accounting A. is primarily concerned with internal reporting. B. is more concerned with verifiable, historical information than is cost accounting. C. focuses on the parts of the organization rather than the whole. D. is specifically directed at management decision-making needs. 5. In comparing financial and management accounting, which of the following more accurately describes management accounting information? A. historical, precise, useful B. required, estimated, internal C. budgeted, informative, adaptable D. comparable, verifiable, monetary 6. Which of the following statements about management or financial accounting is false? A. Financial accounting must follow GAAP.

B. Management accounting is not subject to regulatory reporting standards. C. Both management and financial accounting are subject to mandatory recordkeeping requirements. D. Management accounting should be flexible.

7. Financial accounting and managerial accounting are both highly concerned with A. preparing budgets. B. determining product cost. C. providing managers with information necessary for control purposes. D. determining performance standards. 8. Which of the following best describes the difference between financial and managerial accounting? A. Managerial accounting provides information to support decisions, while financial accounting does not. B. Managerial accounting is not restricted to generally accepted accounting principles, while financial accounting is restricted to GAAP. C. Managerial accounting does not result in financial reports, while financial accounting does result in financial reports. D. Managerial accounting is concerned solely with the future and does not record events from the past, while financial accounting records only events from past transactions. 9. Which of the following is not one of the five basic phases of the management process? A. Controlling B. Operating C. Planning D. Decision making 10. Which of the following is not considered a cost of manufacturing a product? A. Direct materials cost B. Sales salaries C. Factory overhead cost D. Direct labor cost 11. Which of the following costs would be included as part of the factory overhead costs of the microcomputer manufacturer?

C. costs decrease. D. costs remain constant.

17. According to CVP analysis, a company could never incur (gá nh chịu) a loss that exceeded its total A. variable costs. B. fixed costs. C. costs. D. contribution margin. 18. CVP analysis is based on concepts from A. standard costing. B. variable costing. C. job order costing. D. process costing 19. In CVP analysis, linear functions are assumed for A. contribution margin per unit. B. fixed cost per unit. C. total costs per unit. D. Total mixed costs 20. Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only A. fixed and mixed costs. B. relevant fixed costs. C. relevant variable costs. **D. a relevant range of volume.

  1. After the level of volume exceeds the break-even point** A. the contribution margin ratio increases. B. the total contribution margin exceeds the total fixed costs. C. total fixed costs per unit will remain constant. D. the total contribution margin will turn from negative to positive.

22. At the break-even point, fixed costs are always A. less than the contribution margin. B. equal to the contribution margin. C. more than the contribution margin. D. more than the variable cost. 23. The method of cost accounting that lends itself to break-even analysis is A. variable. B. standard. C. absolute. D. absorption 24. If a firm's net income does not change as its volume changes, the firm('s) A. must be in the service industry. B. must have no fixed costs. C. sales price must equal $0. **D. sales price must equal its variable costs.

  1. Break-even analysis assumes over the relevant range that A. total variable costs are linear. ( tổng chi phí biến đổi là tuyến tính)** B. fixed costs per unit are constant. C. total variable costs are nonlinear. D. total revenue is nonlinear. 26. To compute the break-even point in units, which of the following formulas is used? A. FC/CM per unit B. FC/CM ratio C. CM/CM ratio D. (FC+VC)/CM ratio 27. A firm's break-even point in dollars can be found in one calculation using which of the following formulas? A. FC/CM per unit B. VC/CM

33. A budget is A. a planning tool. B. a control tool. C. a means of communicating goals to the firm's divisions. **D. all of the above.

  1. Strategic planning is** A. planning activities for promoting products for the future. B. planning for appropriate assignments of resources. C. setting standards for the use of important but hard-to-find materials. **D. stating and establishing long-term plans.
  2. Which of the following statements is true?** A. All organizations have the same set of budgets. B. All organizations are required to budget. C. Budgets are a quantitative expression of an organization's goals and objectives. D. Budgets should never be used to evaluate performance. 36. Which of the following is not an "operating" budget? A. sales budget B. production budget C. purchases budget **D. capital budget
  3. The master budget is a static budget because it A. is geared to only one level of production and sales.** B. never changes from one year to the next. C. covers a preset period of time. D. always contains the same operating and financial budgets. 38. The master budget is a (ngân sách tổng thể) A. static budget. B. flexible budget.

C. qualitative expression of a prior goal. D. qualitative expression of a future goal.

39. The master budget usually includes A. an operating budget. B. a capital budget. C. pro forma financial statements. **D. all of the above.

  1. Chronologically, the first part of the master budget to be prepared would be the A. sales budget.** B. production budget. C. cash budget. D. pro forma financial statements. 41. An example of a recurring short-term plan is(kế hoạch đ ịnh kì ngắn hạn) A. a probable product line change. B. expansion of plant and facilities. C. a unit sales forecast. D. a change in marketing strategies. 42. If the chief accountant of a firm has to prepare an operating budget for the coming year, the first budget to be prepared is the A. sales budget. B. cash budget. C. purchases budget. D. capital budget. 43. Budgeted production for a period is equal to A. the beginning inventory + sales - the ending inventory. B. the ending inventory + sales - the beginning inventory. C. the ending inventory + the beginning inventory - sales. D. sales - the beginning inventory + purchases.

49. Depreciation on the production equipment would appear in which of the following budgets? A. cash budget B. production budget C. selling and administrative expense budget **D. manufacturing overhead budget

  1. The selling, general, and administrative expense budget is based on the _______________ budget.** A. production B. sales C. cash D. purchases 51. The budgeted amount of selling and administrative expense for a period can be found in the A. sales budget. B. cash budget. C. income statement. (pro forma income statement) D. balance sheet. 52. Which of the following represents a proper sequencing in which the budgets below are prepared? A. Direct Material Purchases, Cash, Sales B. Production, Sales, Income Statement C. Sales, Balance Sheet, Direct Labor **D. Sales, Production, Manufacturing Overhead
  2. The budgeted payment for labor cost each period would be found in the** A. labor budget. B. pro forma income statement. C. selling, general, and administrative expense budget. **D. cash budget.
  3. The cash budget ignores all**

A. dividend payments. B. sales of capital assets. C. noncash accounting accruals. (dồn tích kế toán không dùng tiền mặt) D. sales of common stock.

55. Which of the following items would not be found in the financing section of the cash budget? A. cash payments for debt retirement B. cash payments for interest C. dividend payments **D. payment of accounts payable

  1. Chronologically, the last part of the master budget to be prepared would be the A. financial statements. (pro forma financial statement)** B. cash budget. C. capital budget D. production budget. 57. A financial statement is A. a financial statement for past periods. B. a projected or budgeted financial statement. C. presented for the form but contains no dollar amounts. D. a statement of planned production. 58. The budgeted cost of goods sold in a future period would be found in the A. production budget. B. sales budget. C. purchases budget. **D. income statement.
  2. A budget that includes a 12-month planning period at all times is called a ____________ budget.** A. pro forma B. flexible

A. to make things easier for managers in the production facility. B. to provide a distinct measure of cost control. C. to minimize the cost per unit of production. D. b and c are correct.

66. The standard cost card contains quantities and costs for A. direct material only. B. direct labor only. C. direct material and direct labor only. **D. direct material, direct labor, and overhead.

  1. Standard costs may be used for** A. product costing. B. planning. C. controlling. **D. all of the above.
  2. The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor rate variance. TRUE
  3. The difference between the actual wages paid to employees and the standard wages for all hours worked is the labor efficiency variance. FALSE
  4. A flexible budget is an effective tool for budgeting factory overhead. TRUE
  5. The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead spending variance. TRUE
  6. The difference between actual variable overhead and budgeted variable overhead based upon actual hours is referred to as the variable overhead efficiency variance. FALSE
  7. The difference between actual and budgeted fixed factory overhead is referred to as a fixed overhead spending variance.**

TRUE

**74. The difference between actual and budgeted fixed factory overhead is referred to as a fixed overhead volume variance. FALSE

  1. A fixed overhead volume variance is a controllable variance. FALSE
  2. A budget variance is a controllable variance. TRUE
  3. Financial accounting is most concerned with meeting the needs of internal users. FALSE
  4. Managerial accounting is most concerned with meeting the needs of external users. TRUE
  5. Managerial accounting is highly regulated by rules and regulations. FALSE
  6. Financial accounting is most concerned with addressing the needs of the firm as a whole TRUE
  7. Managerial accounting is most concerned with addressing the needs of individual departments of the firm.** **TRUE
  8. Financial accounting is most concerned with meeting the needs of external users. TRUE
  9. Financial accounting is most concerned with meeting the needs of internal users. FALSE
  10. Financial accounting is highly regulated by rules and regulations. TRUE
  11. Managerial accounting is most concerned with addressing the needs of the firm as a whole.** **FALSE
  12. Financial accounting is most concerned with addressing the needs of individual departments of the firm.**

**99. If sales exceed production, absorption costing net income is less than variable costing net income. TRUE

  1. If sales exceed production, absorption costing net income exceeds variable costing net income. FALSE** CHAPTER 1: INTRODUCTION TO MANGARIAL ACCOUNTING The statement of cost of goods manufactured is prepared using the following three steps: ▪ Step 1. Determine the cost of direct materials used during the period. ➔ Beg material inv + Purchase – End material inv ▪ Step 2. Determine the total manufacturing costs incurred during the period. ➔ Direct material cost + Direct labor cost + Factory overhead cost ▪ Step 3. Determine the cost of goods manufactured during the period. ➔ COGM = WIPbeg + Total manufacturing costs – WIPend Determine cost of goods sold. ➔ COGS = FGbeg + COGM – FGend CHAPTER 2: COST-VOLUME-PROFIT ANALYSIS COST BEHAVIOR
  • Variable cost
  • Fixed cost
  • Mixed cost (High-Low method) CVP Relationship
  • Contribution margin = S – VC
  • Contribution margin ratio = CM/S = ucm/p = (p-uvc)/p
  • Unit contribution margin = p – uvc CVP Analysis
  • Break-even Point = FC/ucm (in units) ; = FC/Rcm (in dollars)
  • Target Profit = (FC + OI)/ucm
  • CVP chart: cost line, sales line, selling price, fixed cost, unit variable cost, BEP, income …

SPECIAL RELATIONSHIPJ AND ANALYSES

  • Sales mix -> BEP more than one product
  • Operating leverage = CM/OI
  • Margin of safety = S – SBEP (in $); = (S – SBEP)/S (in %) CHAPTER 3: VARIABLE COSTING FOR MANAGERMENT ANALYSIS ABSORPTION COSTING Sales Cost of goods sold (<- Beg inv <-> COGM <-> End inv) Gross profit SG&A Operating income VARIABLE COSTING Sales Variable cost of goods sold (<- Beg inv <-> COGM <-> End inv) Manufacturing margin Variable SG&A Contribution margin Fixed cost Fixed manufacturing cost Fixed SG&A Operating income CHAPTER 4: BUDGETING Sales budget: ➔ Total sales = Volume * price Production budget: ➔ Units sales + end – beg Direct material purchase budget: ➔ … Direct labor budget: ➔ …

o Dupont formular: ROI = Profit margin x Investment turnover o Profit margin = OI/S o Investment turnover = S/IA o Residual income = OI – minimum acceptable ROI