Asked by Isabella Pucci on May 31, 2024
Verified
Which of the following is most associated with managerial accounting?
A) must follow GAAP
B) may rely on estimates and forecasts
C) is prepared for users outside the organization
D) always reports on the entire entity
Managerial Accounting
The practice of analyzing, interpreting, and presenting financial information to management for the purpose of informed decision-making.
GAAP
Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting.
Estimates
Approximations or informed guesses made about future events or values, often used in budgeting and planning.
- Understand the definitions and roles of managerial accounting within a business.
- Acquire knowledge about the variances between managerial and financial accounting.
Verified Answer
HP
HARINDER PAL SINGHJun 02, 2024
Final Answer :
B
Explanation :
Managerial accounting often involves making decisions based on estimates and forecasts, rather than following strict GAAP guidelines. It is also primarily prepared for internal users, rather than external stakeholders. Option A is more closely associated with financial accounting, while option D is not necessarily true as managerial accounting may report on specific segments or departments within an entity.
Learning Objectives
- Understand the definitions and roles of managerial accounting within a business.
- Acquire knowledge about the variances between managerial and financial accounting.