Question

True (T) or False (F): T F
1. Management accounting provides economic and financial information for external users such as shareholders, creditors and banks.
2. Financial accounting provides information for managers and other internal users.
3. Financial accounting reports past results.  
4. Management accounting is future oriented.  
5. Management accounting is required to follow generally accepted accounting principles.
6. Financial accounting examines monetary and non-monetary events.
7. Cost accounting is used as a means of fixing a selling price.
8. Cost accounting looks at the company as a whole and not at the various units, jobs or processes.
9. Financial accounting is concerned with how and why profits arise.
10. Cost accounting depends entirely on historical information

Answer 1

1. False, Managerial accounting provides financial information for internal users and supports decision making.

2. False, Financial accounting provides historical financial information for external users such as creditors, banks etc.

3.True, Financial accounting reports Past results or historical data.

4. True, Managerial accounting reports are Forward focused.

5. False, Financial accounting is required to follow generally accepted accounting principles.

6. False, Financial accounting only examines monetary events. But managerial accounting may examine non monetary events as well  for the purpose of decision making..

7. True, cost accounting helps in fixing the price.

8. False, Financial accounting looks at the company as a whole where as cost accounting focuses on a single cost unit or individual items.

9. False, Financial accounting is concerned with recording and reporting of financial data.

10. True. Historical data forms the base for cost accounting.