A Basic Difference Between Managerial Accounting and Financial Accounting Is

question 343

Multiple Choice

A basic difference between managerial accounting and financial accounting is that managerial accounting

• A) adheres to rules set by the GASB, while financial accounting uses a different group of rules set by the FASB.
• B) involves the preparation of the balance sheet and income statement while financial accounting involves the preparation of the statement of cash flows.
• C) handles recording and classifying information about transactions that have no direct financial impact on the firm, while financial accounting handles the recording and classifying of information about transactions that do have a financial impact.
• D) provides information primarily intended for managers and others inside the company, while financial accounting provides information primarily intended for people outside the organization.

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Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes to fixed costs and profit.

Accounting Break-even

The point at which a company's revenues exactly cover its expenses, leading to a net income of zero.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and hourly labor.

Proposed Project

A plan or proposal for a course of action, especially in a business or scientific context.