7. Which type of authority do management accountants generally exercise?
a. Functional b. Company c. Line d. Staff
8. Which of the following is not a characteristic of a “Staff” authority?
a. It gives support, advise, and service to line managers.
b. It is exercised laterally or upward.
c. It has the authority to command action or give orders to subordinates.
d. None of the above
9. In financial accounting, certain rules and regulations must be followed on how financial statements
must be presented to the reader. In managerial accounting, no such restrictions generally apply because
it is:
a. An entirely different field that need not observe the broad guidelines in financial accounting.
b. Designed to provide management with non-financial information for decision-making.
c. Designed to provide accounting and other financial data to assist management in making
business decisions.
d. A discipline that does not require preparation of other financial statements.
e. All of the above.
10. Which of the following characteristics relate to Financial Accounting?
a. Reports are promptly prepared and submitted to preserve its usefulness.
b. Data may be both historical and estimates.
c. It must adhere to the generally accepted accounting principles.
d. It provides information needed by management in making decisions.
11. The following characteristics refer to Financial Accounting except
a. Provides information to external users
b. Emphasizes on objective data
c. Has no externally imposed standards
d. Generates general purpose financial statements
12. To distinguish between management accounting and financial accounting, the following statements
are correct, except
a. Management accounting, in view of its various integrated recipients should have a separate
data recording and retrieval system from financial accounting.
b. Financial accounting is bound by GAAP, and management accounting need not be in conformity
with GAAP.
c. Financial accounting can be regarded as the process while management accounting can be regarded
as the product of the process.
d. Management accounting output must be released on time so as not to erode its usefulness; Financial
accounting output can still be useful even when delayed.
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