The basic difference between managerial accounting and financial accounting is that:
A) the financial accounting system relies on accounting information whereas managerial accounting does not.
B) financial accounting relies on information gathered from sources outside the business whereas managerial accounting relies on internally generated information.
C) financial accounting is concerned with providing information to outsiders, whereas managerial accounting is concerned with providing information to managers for their use in directing the activities of the organisation.
D) managerial accounting information is useful to not-for-profit organisations, but financial accounting information is not.

Question

Quizplus · Accepted Answer

Financial accounting is concerned with providing information to external stakeholders, such as investors, creditors, and regulatory agencies, while managerial accounting provides information for internal use by managers in decision making and directing the organization's activities. Managerial accounting information is used for planning, controlling, and evaluating operations, while financial accounting information is used for reporting financial performance to external stakeholders.

The Basic Difference Between Managerial Accounting and Financial Accounting Is