Both Financial and Managerial Accounting Rely on the Same Underlying

question 2

Multiple Choice

Both financial and managerial accounting rely on the same underlying financial data but there are major differences.Managerial Accounting:

• A) emphasizes financial consequences of past activities.
• B) emphasizes precision.
• C) emphasizes relevance.
• D) must follow GAAP.

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Definitions:

Interest Rate

An interest rate is the percentage of principal charged by the lender for the use of its money, or the rate earned on deposited funds.

Futures Contracts

Legally binding arrangements to engage in the buying or selling of a designated financial asset or commodity at a price established in advance, to be executed at a designated future time.

Price Risk

This refers to the possibility of an investor experiencing losses due to changes in the market price of a security.

Hedge

Hedging involves making an investment to reduce the risk of adverse price movements in an asset, typically by taking an offsetting position in a related security.