Question

1. Financial accounting is focused mostly on
a. controlling and planning for costs
b. reporting for external users such as creditors, shareholders, etc.
c. performing an evaluation of profitability.
d. providing information for strategic and tactical decisions.
e. providing analysis to facilitate long-term decision making.

2. Which of the following is something management accountants should do to satisfy their users?
a. provide specialized information that given users can use
b. consider only financial measures
c. focus exclusively on internal users
d. follow generally accepted accounting principles
e. focus on planning more than control

3. "Cost management" describes
a. the actions by managers to increase value for customers while continuously reducing and controlling costs.
b. the identification of excessive costs in the production process.
c. the satisfaction of customers' needs.
d. actions by managers to satisfy customers while maintaining current cost levels.
e. ensuring all costs remains constant.

4. Management accounting
a. measures, analyzes, and reports financial and nonfinancial information to internal managers.
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.
e. must follow generally accepted accounting principles.

5. Strategy specifies
a. how an organization matches its own capabilities with the opportunities in the marketplace.
b. standard procedures to ensure quality products.
c. incremental changes for improved performance.
d. the demand created for products and services.
e. that a company's financial procedures are in compliance with IFRS/ASPE.

Answer 1

1. Answer is option : (b) - reporting for external users such as creditors, shareholders, etc.

Explanation : Financial accounting provides information that is used by the external parties like creditors, shareholders, suppliers, government etc.

2. Answer is option : (c) - focus exclusively on internal users

Explanation : The main focus of management accountant is on internal users like product manager, sales manager, executives ect. The users of management accounting informations are primarly the managers of the organization. So management accountants should focus exclusively on internal users.

3. Answer is option : (a) the actions by managers to increase value for customers while continuously reducing and controlling costs.

Explanation : Cost management aims at continuously controlling the cost and increasing value for customers. It aims at managing, controlling and eliminating expenses.

4. Answer is option : (a) - measures, analyzes, and reports financial and nonfinancial information to internal managers.

Explanation : Management accounting is the process of measuring, analyzing, and reporting financial and nonfinancial information to internal managers whicg helps them in decision making process in achieving business goals.

5. Answer is option : (a) - how an organization matches its own capabilities with the opportunities in the marketplace

Explanation : Strategy is the planning of the organization which it uses to exploite the opportunities available in the market along with is own capabilities to attain one or more aorganization’s goal.