BASTRCSX Module 1 Self-Test Managerial Accounting and Business Environment
BASTRCSX Module 1 Self-Test Managerial Accounting and Business Environment
Y 2020 - 2021
STRATEGIC COST MANAGEMENT
Self-Test (ungraded)
Topic 1: Management Accounting and Business Environment
General Instruction: Write your answer on the space provided for each item.
Part I.
F 1. Published financial statements show costs classified by behavior.
T 2. Generally accepted accounting principles govern financial accounting but not managerial
accounting.
T 3. Economic events are the raw data for both financial and managerial accounting.
F 4. Internal financial statements must be prepared using generally accepted accounting principles.
T 5. The form and content of reports can influence decisions made by managers.
F 6. Management-by-objectives and management-by-exception are two names for the same general
management principle.
F 7. "Pro forma" is the name given to an income statement that classifies costs by function.
T 8. Some managerial accounting reports contain costs not incorporated in the basic accounting
system.
F 9. A professional examination exists to test the competence of financial accountants, but not of
managerial accountants.
F 10. Managerial accountants should, but have no obligation to, maintain their professional skills.
Part II.
Match the items in the two columns below by entering the appropriate code letter in the space
provided.
1
Part III.
COMPLETION STATEMENTS
1. Financial accounting information is prepared mainly for external users, while managerial accounting
information is prepared primarily for internal users.
2. The types of reports prepared in managerial accounting are often special purpose reports prepared
for a specific decision.
3. Managerial accounting reports generally pertain to subunits of a business and may be very
detailed.
4. Three broad managerial functions are: (1) planning, (2) controlling, and (3) directing.
5. The planning function is concerned with setting goals and objectives for the entity.
6. Exercising good judgment in performing the managerial functions and choosing among alternative
courses of action is called decision-making.
7. The three cost elements in manufacturing a product are (1) direct materials, (2) direct labor, and (3)
manufacturing overhead.
8. The work of factory employees that can be physically and directly associated with converting raw
materials into products is classified as direct labor.
11. A major difference between the income statements of a merchandising company and a
manufacturing company is that the cost of goods sold section of a merchandising company shows
cost of goods purchased, whereas a manufacturing company shows cost of goods manufactured.
12. Direct materials used is added to direct labor and manufacturing overhead to get total
manufacturing costs for the current period.
13. The ending work in process inventory is subtracted from the total cost of work in process to
calculate cost of goods manufactured.
14. A manufacturing company computes cost of goods sold by adding cost of goods manufactured to
the finished goods inventory, beg. and subtracting the finished goods inventory, end.
15. A manufacturing company usually has three inventory accounts which are (1) Raw Materials
Inventory, (2) Work in Process Inventory, and (3) Finished Goods Inventory.