The Field of Accounting That Serves Internal Users of a Company's

question 176

Multiple Choice

The field of accounting that serves internal users of a company's financial information is

• A) financial accounting.
• B) auditing.
• C) public accounting.
• D) bookkeeping.
• E) managerial accounting.

---

Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales within a certain range, such as rent, salaries, and insurance.

Variable Cost

A cost that varies with the level of output or activity, such as materials and labor costs.

Operating Leverage

A financial ratio that measures the degree to which a firm or project can increase operating income by increasing revenue.

Operating Income

The income earned from a company's day-to-day operations, calculated before taking into account interest and taxes.