Question

Which of the following is the primary focus of financial accounting?

A) providing summarized information on operational results to investors and creditors

B) providing highly detailed information on product lines, regions, and divisions

C) providing information to managers to assist in planning, directing and controlling operations

D) providing information that managers need to make operational decisions

Which of the following statements is true of managerial accounting?

A) Managerial accounting information must comply with Generally Accepted Accounting Principles.

B) The external stakeholders of a company are the primary users of managerial accounting.

C) Managerial accounting information is used to help managers plan, direct and control their operations.

D) An external audit by an independent CPA is required for managerial accounting information.

Answer 1

1) Solution: providing summarized information on operational results to investors and creditors

Explanation: Financial accounting provides information that is used by the external parties outside the organisation

2) Solution: Managerial accounting information is used to help managers plan, direct and control their operations

Explanation: Management accounting helps the internal management to enhance decision support objectives, customer value, internal business processes, resource application, and capacity utilization needed in achieving the goals in an optimal manner