The Basic Difference Between Managerial Accounting and Financial Accounting Is

question 22

Multiple Choice

The basic difference between managerial accounting and financial accounting is that:

• A) the financial accounting system relies on accounting information whereas managerial accounting does not.
• B) financial accounting relies on information gathered from sources outside the business whereas managerial accounting relies on internally generated information.
• C) financial accounting is concerned with providing information to outsiders, whereas managerial accounting is concerned with providing information to managers for their use in directing the activities of the organisation.
• D) managerial accounting information is useful to not-for-profit organisations, but financial accounting information is not.

---

Definitions:

Standard Deviation

A measure of the amount of variability or spread in a set of data points; in finance, it's often used to quantify the risk associated with a particular investment.

Risk Premium

The additional return expected by an investor for taking on a higher level of risk, compared to a risk-free investment.

Nominal Interest Rate

The interest rate in terms of nominal (not adjusted for purchasing power) dollars.

Coupon Rate

A bond’s interest payments per dollar of par value.