A Distinction Is Often Made Between Management Accounting and Financial

question 385

Multiple Choice

A distinction is often made between management accounting and financial accounting. Management accounting focuses on internal reporting. It measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. Financial accounting focuses on reporting to external parties. It measures and records business transactions and provides financial statements issued to investors, government regulators, and other interested parties. Charles T. Horngren, Cost Accounting, A Managerial Emphasis, 13^th ed.

• A) Nonargument.
• B) Argument; conclusion: Management accounting focuses on internal reporting.
• C) Argument; conclusion: A distinction is often made ... financial accounting.
• D) Argument; conclusion: It measures and records business transactions ... parties.
• E) Argument; conclusion: Financial accounting focuses on ... external parties.

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Definitions:

Income

Earnings from work or investments, including wages, salaries, dividends, and interest.

Expenditure

The act of spending funds or disbursing money for various purposes such as operations, investments, or consumption.

GDP Per Person

A measure of a country's economic output that accounts for its number of people, indicating average economic productivity per person.

Life Expectancy

The average number of years a person is expected to live, based on current mortality rates and health conditions.