GAAP must be followed when preparing managerial accounting reports.

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GAAP (Generally Accepted Accounting Principles) is a set of guidelines and standards for financial accounting and reporting. It pertains to financial statements prepared for external users, such as investors and creditors. Managerial accounting reports, on the other hand, are intended for internal use by management to aid in decision-making. While GAAP does not apply to managerial accounting reports, they still need to be accurate and reliable to ensure effective decision-making.

GAAP Must Be Followed When Preparing Managerial Accounting Reports