Which of the Following Statements Is True About Management Accounting

question 27

Multiple Choice

Which of the following statements is true about management accounting?

• A) Management accounting provides financial reports to external parties that require information to meet their decision needs.
• B) Management accounting is largely unregulated.
• C) Management accounting attempts to protect the information rights and needs of all users.
• D) Management accounting adopts a pro-regulation perspective.

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Definitions:

Risk Classes

Categories of investments grouped together based on their similar level of risk.

Discount Rates

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often used in capital budgeting to evaluate potential projects.

Equity Capital

Funds raised by a company through the sale of common or preferred stock.