Management accounting and financial accounting differ in that management accounting information is prepared
A) following prescribed rules.
B) using whatever methods the company finds beneficial.
C) for shareholders.
D) to summarise the whole company with little detail.

Question

Quizplus · Accepted Answer

Management accounting information is used for internal decision-making purposes, and therefore can be prepared using methods that are specifically tailored to the needs of the company. In contrast, financial accounting information is prepared following prescribed rules, and is primarily used for external reporting purposes to provide information to stakeholders such as shareholders. The other options are incorrect because management accounting is not prepared for shareholders, and it often provides detailed information about specific aspects of the company rather than summarizing the whole company.

Management Accounting and Financial Accounting Differ in That Management Accounting