,1. Multiple Choice: What is the primary objective of managerial
accounting?
a) Tax reporting
b) Financial reporting
c) Internal decision making
d) External auditing
Answer: c) Internal decision making
Rationale: Managerial accounting focuses on providing
information for use by internal users in the organization, primarily
for decision making.
2. True/False: The matching principle requires that expenses be
recorded when incurred in earning revenue.
Answer: True
Rationale: The matching principle is a fundamental accounting
concept that dictates that expenses should be matched with the
revenues they help to generate.
, 3. Fill-in-the-Blank: The __________ method of accounting
recognizes revenue when it is earned and expenses when they are
incurred.
Answer: Accrual
Rationale: The accrual method of accounting records financial
transactions when they occur, regardless of when cash transactions
happen.
4. Multiple Response: Which of the following are considered
financial statements? (Select all that apply)
a) Balance Sheet
b) Income Statement
c) Cash Flow Statement
d) Statement of Shareholders' Equity
e) Bank Reconciliation Statement
Answers: a) Balance Sheet, b) Income Statement, c) Cash Flow
Statement, d) Statement of Shareholders' Equity
Rationale: These are the primary financial statements used to
report a company's financial performance, except for the bank
reconciliation statement, which is a tool to ensure the bank's
records are in agreement with the company's.
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