Which of the following statements is TRUE?
A) Businesses must follow GAAP for managerial accounting reports.
B) Measuring and controlling costs is only necessary for businesses who focus on low cost.
C) Businesses who choose a product differentiation strategy to achieve competitive advantage focus on research, and development not managerial accounting.
D) Businesses create value by combining and converting resources into goods or services that customers want at either a lower cost or better quality than competitors.

Question

Quizplus · Accepted Answer

Managerial accounting is not strictly regulated by GAAP as it is internal and focuses on the needs of management rather than external reporting. Measuring and controlling costs is essential for all businesses, regardless of their competitive strategy, to ensure efficiency and profitability. Businesses pursuing product differentiation still rely on managerial accounting to track costs and performance. The correct statement is D, as businesses indeed create value by transforming resources into desirable goods or services, aiming to offer them at lower costs or with better quality than their competitors to gain a competitive advantage.

Which of the Following Statements Is TRUE