Which of the following statements represents a similarity between ﬁnancial and managerial accounting?
A)Both are useful in providing information for external users.
B)Both are governed by GAAP.
C)Both draw upon data from an organization's accounting system.
D)Both rely heavily on published ﬁnancial statements.
E)Both are solely concerned with historical transactions.

Question

Quizplus · Accepted Answer

Both financial and managerial accounting rely on data from an organization's accounting system to provide information for decision making. However, financial accounting is oriented towards external users while managerial accounting is oriented towards internal users. GAAP (Generally Accepted Accounting Principles) pertains only to financial accounting, and while published financial statements may be used in managerial accounting, it is not the primary focus. Both financial and managerial accounting may use historical transactions, but managerial accounting can also incorporate forecasts and projections.

Which of the Following Statements Represents a Similarity Between ﬁNancial