1Managerial accounting focuses on information for decision makers outside the company, such as creditors and taxing authorities.
2Business owners use accounting information to set goals, evaluate progress toward those goals, and take corrective action when needed.
3Outside investors would ordinarily use financial accounting information to decide whether or not to invest in a business.
5A creditor is a party that has an ownership interest in a business.
7Many organizations have contributed to the establishment of generally accepted accounting principles. Which of the following organizations has the primary responsibility for formulating accounting standards?
A) FASB
B) CMA
C) AICPA
D) SEC
8Which of the following is a licensed accountant who serves the general public rather than an accountant who serves one particular company?
A) CPA
B) CMA
C) SEC
D) FASB
9The primary objective of financial reporting is to provide information useful for making investment and lending decisions. Which of the following is NOT one of the basic characteristics that financial information must possess to be useful?
A) Reliability
B) Creativity
C) Relevance
D) Comparability
10Accountants often refer to GAAP. What do the letters GAAP represent in accounting?
A) Globally accepted and accurate policies
B) Global accommodation accounting principles
C) Generally accredited accounting policies
D) Generally accepted accounting principles
11Which of the following are MOST likely to be users of managerial accounting information?
A) Potential investors
B) Creditors
C) Customers
D) Company managers
12Which of the following are likely to be users of financial accounting information?
A) Taxing authorities
B) Creditors
C) Potential investors
D) All of the above