Horngren's Accounting, The Financial Chapters (12th Edition)
Horngren's Accounting, The Financial Chapters (12th Edition)
12th Edition
ISBN: 9780134486789
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
Question
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Chapter 18, Problem 1QC
To determine

Managerial Accounting: The objective of management accounting is to take decisions for the business. On the basis of financial accounting information, management accounting prepares the forecast and future plans, measures risk and performance and allocates resources for optimum utilization.

To identify: The item which is not a characteristic of managerial accounting

Expert Solution & Answer
Check Mark

Answer to Problem 1QC

Option ‘a’is correct.

Emphasizes the external financial statement is correct.

Explanation of Solution

External Financial Statements are prepared under financial accounting for the reference and usage of external users like investors, government, public, and media. The objective of management accounting is to help the management accountants who internal users.

Option b.

Provide detailed information about individual parts of the company.

Management Accounting classifies and rearranges the information provided by financial accounting and cost accounting. Both the cost and financial accounting cover each aspect of the company. For example financial statement for holding and subsidiary companies are prepared individually and also in consolidated form

So, option b is incorrect.

Option c.

Emphasizes relevance

Management accounting emphasizes more on relevance compared to financial accounting. Relevance means that the information offered is useful and impacts the decision of the users.

So, option c is incorrect.

Option d .

Focuses on the future.

The Management Accounting studies the past financial accounting information and analyzes them to make future-oriented plans and forecasts. The budgets, ratios, variances, and projections computed in management accounting serve as a base for decision making.

So, option d is incorrect.

Conclusion

Thus, option ‘a’ is correct among the given options.

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Chapter 18 Solutions

Horngren's Accounting, The Financial Chapters (12th Edition)

Ch. 18 - What is the primary purpose of managerial...Ch. 18 - List six differences between financial accounting...Ch. 18 - Explain the difference between line positions and...Ch. 18 - Explain the differences between planning,...Ch. 18 - Prob. 5RQCh. 18 - Describe a service company, and give an example.Ch. 18 - Describe a merchandising company, and give an...Ch. 18 - How do manufacturing companies differ from...Ch. 18 - List the three inventory accounts used by...Ch. 18 - Explain the difference between a direct cost and...Ch. 18 - What are the three manufacturing costs for a...Ch. 18 - Give five examples of manufacturing overhead.Ch. 18 - What are prime costs? Conversion costs?Ch. 18 - What are product costs?Ch. 18 - How do period costs differ from product costs?Ch. 18 - How is cost of goods manufactured calculated?Ch. 18 - How does a manufacturing company calculate cost of...Ch. 18 - How does a manufacturing company calculate unit...Ch. 18 - How does a service company calculate unit cost per...Ch. 18 - How does a merchandising company calculate unit...Ch. 18 - Prob. S18.1SECh. 18 - Prob. S18.2SECh. 18 - Distinguishing between direct and indirect costs...Ch. 18 - Computing manufacturing overhead Learning...Ch. 18 - Identifying product costs and period costs...Ch. 18 - Computing cost of goods sold, merchandising...Ch. 18 - Computing cost of goods sold and operating income,...Ch. 18 - Prob. S18.8SECh. 18 - Prob. S18.9SECh. 18 - Prob. S18.10SECh. 18 - S18-11 Matching business trends...Ch. 18 - Prob. S18.12SECh. 18 - Prob. E18.13ECh. 18 - Prob. E18.14ECh. 18 - Prob. E18.15ECh. 18 - Prob. E18.16ECh. 18 - Identifying differences between service,...Ch. 18 - Prob. E18.18ECh. 18 - Computing cost of goods manufactured Learning...Ch. 18 - Prob. E18.20ECh. 18 - Prob. E18.21ECh. 18 - Prob. E18.22ECh. 18 - Prob. E18.23ECh. 18 - Prob. E18.24ECh. 18 - Prob. P18.25APGACh. 18 - Classifying period costs and product costs...Ch. 18 - Calculating cost of goods sold for merchandising...Ch. 18 - Prob. P18.28APGACh. 18 - Preparing a schedule of cost of goods manufactured...Ch. 18 - Prob. P18.30APGACh. 18 - Prob. P18.31APGACh. 18 - Prob. P18.32APGACh. 18 - Prob. P18.33BPGBCh. 18 - Prob. P18.34BPGBCh. 18 - Prob. P18.35BPGBCh. 18 - Prob. P18.36BPGBCh. 18 - Prob. P18.37BPGBCh. 18 - Prob. P18.38BPGBCh. 18 - Prob. P18.39BPGBCh. 18 - Prob. P18.40BPGBCh. 18 - Prob. P18.41CTCh. 18 - Prob. P18.42CPCh. 18 - Prob. 18.1TIATCCh. 18 - Prob. 18.1DCCh. 18 - Prob. 18.1EI
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