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:

All Equity Firm

A company that is financed solely through equity without the use of debt or leverage, relying entirely on shareholder funds.

Closely Held

A descriptor for corporations that have a small number of shareholders, with shares not publicly traded and often owned by family members or a small group of investors.

Borrow

The act of obtaining or receiving something with the intention of returning it or its equivalent, often involving money with an agreement to pay interest.

Capital Structure

The mix of different types of debt and equity that a company uses to finance its overall operations and growth.