The Principal Difference Between Management Accounting and Financial Accounting Is

question 20

Multiple Choice

The principal difference between management accounting and financial accounting is that financial accounting information is:

• A)Prepared by managers.
• B)Intended primarily for use by decision makers outside the business organization.
• C)Prepared in accordance with a set of accounting principles developed by the Institute of Certified Management Accountants.
• D)Oriented toward measuring solvency rather than profitability.

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Definitions:

Mutually Exclusive

Situations or events that cannot both occur at the same time, indicating a clear choice between two options.

Required Rate

The minimum return an investor expects to achieve on an investment to compensate for its risk.

Net Present Value

A financial metric that calculates the value of projected future cash flows, discounted back to their present value.

Funds

Financial resources that are saved or obtained for a specific purpose or project, often pooled together from multiple sources.