Man Ch 1

The PRIMARY difference between financial accounting (FA) and managerial accounting (MA) is that:

• FA is used by internal parties while MA is used by external parties.
• FA is future oriented while MA is historical in nature
• FA is used by external parties while MA is used by internal parties.
• FA is prepared as needed but MA is prepared periodically (monthly, quarterly, annually).

Which of the functions of management involves monitoring actual results to see whether the objectives set are being met and determining if corrective action should be taken?

• Implementing
• Controlling
• Planning
• Selling

If the number of units produced increases, then

• Unit variable costs will increase
• Unit fixed costs will decrease
• Total variable costs will remain the same
• Total fixed costs will increase

Suppose you are trying to decide whether to sell your accounting book at the end of the semester or keep it as a reference book for future courses. If you decide to keep the book, the money you would have received from selling the book is a(n)

• sunk cost
• opportunity cost
• out-of-pocket cost
• indirect cost

A company that purchases raw materials and converts them into finished products

• Merchandising Company
• Retailer
• Wholesaler
• Manufacturer

Which of the following is NOT one of the functions of management?

• Planning
• Reviewing
• Implementing
• Controlling

Costs that remain the same in total regardless of the level of activity are called

• Fixed costs
• Variable costs
• Direct costs
• Sunk costs

Money that has already been spent

• Sunk cost
• opportunity cost
• Relevant cost
• Differential cost

Sustainability can be thought of as

• the ability to meet today's needs without sacrificing the ability of future generations to meet their own needs
• a plan in monetary or financial terms
• costs that cannot be reasonably traced or are not worth the effort to trace to a cost object
• the establishment of goals and objectives along with the tactics that will be used to achieve them

The cost of paying an employee to build a tricycle can most accurately be classified as

• direct labor
• manufacturing overhead
• direct materials
• period cost