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Which of the following is least useful in evaluating a relationship (ratio) as either favorable or unfavorable? a. Past performances of the company, comparing two or more years data b. Industry averages c. Data from competitors or industry leaders d. Budgeted projections 2. One reason that a common-size statement is a useful tool in financial performance evaluation is that it enables the user to a. make better comparisons of two companies of different sizes in the same industry. b. determine which companies in a single industry are of the same size. c. judge the relative potential of two companies of similar size in different industries. d. determine which companies in a single industry are of the same value. Management accounting reports can a. use a flexible format. b. use financial and nonfinancial data. c. be prepared for any time period. d. include all of these. Part of the annual report written by management that could be biased (not audited) is the a. Income statement b. Balance sheet c. Footnotes to the financial statements d. Managements discussion & analysis called MD&A for short. Management accounting a. deals primarily with people and organizations outside of the business entity. b. requires only periodic reporting on a regular basis. c. uses any type of useful measurement unit, including physical as well as monetary measures. d. deals only with the double-entry recording system. Which of the following is a characteristic of management accounting? a. It must follow generally accepted accounting principles. b. It is used primarily by internal users. c. It is concerned primarily with reporting past performance. d. It uses historical costs as the sole measurement unit

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