The Statement Concerning Differences Between Financial and Management Accounting Which

question 28

Multiple Choice

The statement concerning differences between financial and management accounting which is false is:

• A)management accounting is less constrained than financial accounting.
• B)managers have much more control over the form and content of their reports.
• C)there is no overlap between management accounting and financial accounting.
• D)the distinction between the two areas, to some extent, reflects differences in access to financial information.

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in production, often expressed as the ratio of total assets to sales revenue.

Full Capacity

The maximum level of production or output that a facility can achieve under normal operating conditions.

Operating Capacity

The maximum output a company can produce under normal working conditions.

Earnings Retention Ratio

The proportion of net income that a company retains to reinvest in its business rather than distributing it to shareholders as dividends.