Management Reporting Theories

The primary difference between financial accounting and managerial accounting is that

• Financial accounting is used by internal parties while managerial accounting is used by external parties.

• Financial accounting is future oriented while managerial accounting is historical in nature.

• Financial accounting is used by external parties while managerial accounting is used by internal parties.

• Financial accounting is prepared and as needed (perhaps even daily), but managerial accounting is prepared periodically (monthly, quarterly, annually).

Which of the functions of management involves monitoring of actual results to see whether the objectives set in the planning stage are being met and, if necessary, taking corrective action to adjust the objectives or implementation of the plan.

• Implementing

• Controlling

• Planning

• Selling

Suppose you have decided to that you would like to purchase a new home in five years. To do this, you will need a down payment of approximately Php20,000.00, which means that you need to save Php350.00 each month for the next five years. This is an example of

• Directing/ Leading

• Controlling

• Planning/ Organizing

• Selling

Which phrase best describes the current role of the managerial accountant?

• Managerial accountants prepare the financial statements for an organization.

• Managerial accountants facilitate the decision-making process within an organization.

• Managerial accountants make the key decisions within an organization.

• Managerial accountants are primarily information collectors.

Which of the following costs would be considered relevant in short-term decision making?

• Production costs of goods available for sale

• Incremental fixed costs

• Acquisition cost of idle asset to be used in a proposed project

• Variable costs

For product costing purposes, an indirect factory cost

• is not directly chargeable to the company.

• is chargeable to prime costs.

• is chargeable to conversion costs.

• is never included in the computation of product cost.

Product cost

• are always expensed in the same period in which they are incurred.

• are inventoriable costs.

• vary directly with the changes in the cost driver.

• are always charged to an asset account in the same period in which they are incurred.

Relevant costs are

• variable past costs.

• all fixed and variable costs.

• anticipated future costs that will differ among various alternatives.

• costs incurred within the relevant range of production.

All of the following are costs in an economist’s perspective except:

• Future cost

• Imputed cost

• Explicit cost

• Marginal cost

Which of the following is not a theoretical cost?

• Implicit cost

• Opportunity cost

• Imputed cost

• Explicit Cost