The principal difference between managerial accounting and financial accounting is that managerial accounting information is:
A)Prepared by managers.
B)Intended primarily for use by decision makers inside the business organization.
C)Prepared in accordance with a set of accounting principles developed by the Institute of Certified Managerial Accountants.
D)Oriented toward measuring solvency rather than profitability.

Question

Quizplus · Accepted Answer

Managerial accounting information is intended for internal use by decision makers within the business organization, whereas financial accounting information is intended for external use by investors, creditors, and other stakeholders who are not directly involved in the day-to-day operations of the business. Managerial accounting focuses on providing information that will help managers make better informed decisions about how to allocate resources, control costs, and maximize profitability. It is not governed by a set of accounting principles developed by any specific organization, but rather by the needs of the business organization.

The Principal Difference Between Managerial Accounting and Financial Accounting Is