Which of the Following Statements Correctly Distinguishes Between Financial and Management

question 51

Multiple Choice

Which of the following statements correctly distinguishes between financial and management accounting?

• A) Management accounting reports on the whole organisation.
• B) Financial accounting is oriented toward the future.
• C) Financial accounting is primarily concerned with providing information for internal users.
• D) Management accounting is oriented more toward the planning and control aspects of management.

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Definitions:

Seasonal Increases

Periodic rises in business activity or demand that occur at the same time each year due to changes in season.

Accounts Receivable Period

The accounts receivable period is the average number of days it takes a company to collect payments owed by its customers.

Operating Cycle

The period of time between the acquisition of goods for production and the cash received from their sale.

Cash Cycle

The period between the outlay of cash for the purchase of inventory and the receipt of cash from accounts receivable, representing the time it takes for a company to turn its investments in inventory back into cash.