Managerial Accounting Is Different from Financial Accounting in That

question 183

Multiple Choice

Managerial accounting is different from financial accounting in that

• A) Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
• B) Managerial accounting never includes nonmonetary information.
• C) Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
• D) Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
• E) Managerial accounting is mainly used to set stock prices.

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Definitions:

Agency Agreement

A legal contract creating a fiduciary relationship whereby the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements.

Gratuitous Basis

A voluntary action carried out without the expectation of payment or compensation.

Unconscionable

A term applied to a contract in which one party has so much more bargaining power than the other party that the powerful party dictates the terms of the agreement and eliminates the other party’s free will.

Constructive Trust

An equitable trust imposed on a person who wrongfully obtains or holds legal right to property he or she should not possess.