Which is correct about financial information? a. Financial information’s purpose is only to comply with needs external users such as the government, investors and external stakeholders. b. Financial information can be used for forecasting and budgeting. c. Financial information deviates from the actual thus it justifies erroneous management decisions. d. Financial information is used by line managers to evaluate performance of staff positions. e. b & d f. All of the above g. None of the above

Which is correct about financial information? a. Financial information’s purpose is only to comply with needs external users such as the government, investors and external stakeholders. b. Financial information can be used for forecasting and budgeting. c. Financial information deviates from the actual thus it justifies erroneous management decisions. d. Financial information is used by line managers to evaluate performance of staff positions. e. b & d f. All of the above g. None of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Information from Management Reporting System are used by business owners in making strategic decisions. The reports created from this are called Group of answer choices b. Discretionary, because the company has no discretion to produce the report or not, the law requires them to generate such reports c. Non discretionary, because the company has sole discretion to produce such reports for internal users. on discretionary, because the company has no discretion to produce the report or not, the law requires them to generate such reports d. Discretionary, because the company has sole discretion to produce such reports for internal users. 2. The entry to record the granting of credit to a customer for a sales return is posted to Group of answer choices a. accounts receivable subsidiary ledger only. b. the general ledger only. c. both the accounts receivable subsidiary ledger and the general ledger. d. both the accounts payable subsidiary ledger and the general ledger.…
External decision makers would not look primarily to financial accounting information to assist them in making decisions on: A. Granting credit B. Capital budgeting C. Selecting stocks D. Mergers and acquisitions
Which of the following statements regarding users of financial information is correct? Managers of an entity are considered to be internal decision Accounting information is prepared for and useful to only outside decision External decision makers can obtain whatever financial data they need and whenever they need it. The members of the Board of Directors are not internal rather than external users of financial
1. Indicate whether each of the following statements describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions? The principal users are the organization’s managers? The key focus is on the entity as a whole? The rules and principles are very flexible? The information gathered is usually available after an independent audit has been completed?
Managerial accounting is diferent from financial accounting in that Multiple Cholce 0:58:38 Managerial accounting is used extensively by Investors, whereas financial accounting is used only by creditors. Managerial accounting never Includes nonmonetary information. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. Managerial accounting is structured and controlled by GAAP. Managerial accounting is more focused on the organization as a whole, while financial accounting is more focused
The AICPA Special Committee on Financial Reporting proposed the following constraints related to financial reporting. 1. Business reporting should exclude information outside of management’s expertise or for which management is not the best source, such as information about competitors. 2. Management should not be required to report information that would significantly harm the company’s competitive position. 3. Management should not be required to provide forecasted financial statements. Rather, management should provide information that helps users forecast for themselves the company’s financial future. 4. Other than for financial statements, management need report only the information it knows. That is, management should be under no obligation to gather information it does not have, or does not need, to manage the business. 5. Companies should present certain elements of business reporting only if users and management agree they should be reported—a concept of…
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Evaluate the following statements from an ethical perspective:“Earnings management in a narrow sense is the behavior of management to play with the discretionary accrual component to determine high or low earnings.”“Earnings are potentially managed, because financial accounting standards still provide alternative methods.”
Which of the following statements is false? O a. Managerial accounting does not need to conform to GAAP. O b. Managerial accounting sometimes relies on past information. Oc. There is no overlap between financial and managerial accounting. O d. Financial accounting must conform to GAAP.
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