GAAP must be followed when managerial accounting reports are prepared.

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) only applies to financial accounting reports that are prepared for external stakeholders. Managerial accounting reports are internal documents and do not need to follow GAAP as they are intended to help management make informed decisions about the company's operations. However, managerial accounting reports should still be accurate, relevant, and timely in order to serve their purpose.

GAAP Must Be Followed When Managerial Accounting Reports Are Prepared