Which of the Following Is an Objective of Management Accounting

question 173

Multiple Choice

Which of the following is an objective of management accounting?

• A)to generate financial statements of a company for tax reporting
• B)to provide information to business managers to assist them in controlling their business
• C)to provide information to shareholders to assist them with their investment decisions
• D)to ensure that the reports produced for internal and external business purposes are GAAP compliant

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Definitions:

Sales Required

The minimum sales needed to achieve a specific financial goal or to cover costs.

Variable Cost

Costs that vary directly with the level of production or output.

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.

Contribution Margins

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.