Management Accounting and Financial Accounting Are Similar in Which of the Following

question 34

Multiple Choice

Management accounting and financial accounting are similar in which of the following respects?

• A) Both use the same unit of measurement.
• B) Both rely heavily on the double-entry system.
• C) Both produce almost all of their respective informational reports on a routine monthly basis.
• D) Both provide relevant and useful information to management.

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Definitions:

Net Income

The total earnings of a company after subtracting all costs and expenses from revenues; also known as net profit.

Revenue Accounts

Accounts that track the income a company generates from its normal business activities, typically from the sale of goods and services to customers.

Expense Accounts

Accounts used to record the consumption of economic benefits during the operational period, contributing to revenue generation.

Income Summary

An account used in the closing process that summarizes revenues and expenses for a period before transferring the balance to retained earnings.