The decisions that financial managers make in companies differ according to the functions related to these decisions. What are the most important decisions made by financial managers working in various companies? What are the most important examples?

The decisions that financial managers make in companies differ according to the functions related to these decisions. What are the most important decisions made by financial managers working in various companies? What are the most important examples?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 2EB: Identify the following as true or false: Financial accounting reports are not released to external...

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Identify the following as true or false: Financial accounting reports are not released to external users. Managerial accounting reports are not used by employees inside the organization. Managerial accounting reports include only monetary information. Financial accounting reports are monetary in nature. If a result of a companys operations is nonmonetary in nature, it must be converted to monetary units for managerial reporting. Tax authorities and government regulatory agencies are external users of financial information.
Consider the dilemma you might someday face if you are the CFO of a company that is struggling to satisfy investors, creditors, stockholders, and internal company managers. All of these financial statement users are clamoring for higher profits and more net assets (also known as equity). If at some point, you suddenly found yourself not meeting the internal and external earnings and equity targets that these parties expect, you would probably search for some way to make the financial statements look better. What if your boss, the CEO, suggested that maybe you should make just one simple journal entry to record all the goods that your company is holding on consignment, as if that significant amount of goods were owned by your company? She might say that this action on your part would fix a lot of problems at once, since adding the consigned goods to merchandise inventory would simultaneously increase net assets on the balance sheet and increase net income on the income statement (since it would decrease cost of goods sold). How would you respond to this request? Write a memo, detailing your willingness or not to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note that the challenge of the assignment is to keep your integrity intact while also keeping your job, if possible.
Indicate whether each of the following statements is true or false. Section 302 of Sarbanes-Oxley requires the CEO and CFO to review all financial reports and sign the reports. One of the three questions put forth by the Institute of Business Ethics is Do I mind others knowing what I have done? Ethical issues may be faced on a small scale, such as making a business decision to produce excess inventory for the sole purpose of trying to influence managers bonuses. A manager who spends excess budgeted funds remaining at the end of a fiscal year on unnecessary expenditures thinking that it is better to use it than lose it is acting ethically. The Foreign Corrupt Practices Act was implemented in 2001 to protect investors by enhancing the accuracy and reliability of corporate financial statements and disclosures.
Managers in decentralized organizations make decisions relating to all of the following except_______. A. the companys stock price B. equipment purchases C. personnel D. prices to charge customers
Which of the following groups would have access to managerial accounting information? A. bankers B. investors C. competitors of the business D. managers
An important goal of a responsibility accounting framework is to help ensure which of the following? A. decision-making is made by the top executives. B. investments made by each segment are minimized. C. identification of operating segments that should be closed. D. segment and company financial goals are congruent.
TRUE or FALSE. Write on the table provided above the word “TRUE” if the statement is correct and write the word “FALSE” if the statement is incorrect. 1. Published financial statements show costs classified by behavior. 2. Generally accepted accounting principles govern financial accounting but not managerial accounting 3. Economic events are the raw data for both financial and managerial accounting. 4. Internal financial statements must be prepared using generally accepted accounting principles. 5. The form and content of reports can influence decisions made by managers. 6. Management-by-objectives and management-by-exception are two names for the same general management principle. 7. "Pro forma" is the name given to an income statement that classifies costs by function. 8. Some managerial accounting reports contain costs not incorporated in the basic accounting system. 9. A professional examination exists to test the competence of financial accountants, but not…
Following are aspects of accounting information. Classify each as pertaining more to financial accounting or to managerial accounting. 1. Primary users are external 5. Controlled by GAAP 2. Includes more nonmonetary information 6. Used in managers’ planning decisions 3. Focuses more on the future 7. Focuses on the whole organization 4. Uses many estimates and projections 8. Not constrained by GAAP
What is one of the ways that accounting is used to direct and control the manager of a corporation? a.Threatening to tell shareholders a mangers income if a manager makes a ‘poor financial’ decision. b.Linking of a mangers performance to a bonus that depends on accounting profit. c.Making decisions based on the accounting information regardless of managerial input. d.Using income smoothing to assure a manager that they can invest in a low risk investment.
PLEASE ANSWER ALL 13. Which of the following is a true statement?a. Neither financial nor management accounting are mandatory.b. Both financial and management accounting emphasize relevance and flexibility.c. Both financial and management accounting place more emphasize on past.d. Both financial and management accounting are based upon the concept of stewardship. 14. Financial accounting is concerned with:a. The company as a whole rather than with segments of a company.b. The needs of stockholders and creditors.c. Meeting the requirements of internal users only.d. Recording the financial history of an organization. 15. The basic difference between management accounting and financial accounting is that:a. Financial accounting is a division of accounting that is Concerned with providing information to stockholders whereas management accounting is concerned with providing information to managers for their use in directing the activities of the organization.b. Financial accounting relies…
3 While preparing the statement of financial performance, the directors of a company exaggerate profit figure than its actual figure to show colorful picture of the entity. This act of the director is termed as_____________ a. All the options b. Table dressing c. Door dressing d. Window dressing
Which of the following are examples of financial objectives that a company might choose to pursue? A Provision of good wages and salaries B Restricting the level of gearing to below a specified target C Dealing honestly and fairly with customers on all occasions D Producing environmentally friendly products Which of the following is true? A Management accounting is highly regulated B Financial accounting is highly regulated C Management accounting is externally focused D Financial accounting is only internally communicated Which of the following is NOT a connected stakeholder? A Shareholders B Customers C Competitors D Local community…