When Comparing Management Accounting and Financial Accounting,which of the Following

question 51

Multiple Choice

When comparing management accounting and financial accounting,which of the following statements is FALSE?

• A) Management accounting has a future orientation whereas financial accounting has a past orientation.
• B) Management accounting prepares detailed reports whereas financial accounting prepares summary reports.
• C) Management accountants are constrained by the principles of reporting promulgated by the Institute of Management Accountants whereas financial accountants are constrained by Generally Accepted Accounting Principles.
• D) Behavioral considerations are of primary importance in management accounting, but not in financial accounting.

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Definitions:

Units of Output

are the measurable quantities of goods or services produced by a firm or economy.

Maximization of Profits

The process by which a company determines the price and output level that generates the most profit.

MP

Marginal Productivity (MP) refers to the additional output resulting from the use of one more unit of a production factor, keeping other inputs constant.

Imperfect Competition

All market structures except pure competition; includes monopoly, monopolistic competition, and oligopoly.