Which of the following statements is true of financial and managerial accounting?
A)Both use historical costs as their primary unit of measurement.
B)Both depend on the double-entry system of accounting.
C)Both require adherence to generally accepted accounting principles.
D)Both assist managers in decision making.

Question

Quizplus · Accepted Answer

Financial accounting focuses on external reporting to stakeholders and uses historical costs as its primary unit of measurement, while managerial accounting focuses on providing information to internal users for decision making. Both types of accounting require adherence to generally accepted accounting principles, but only managerial accounting assists managers in decision making. Therefore, the statement that best represents both financial and managerial accounting is that both assist managers in decision making.

Which of the Following Statements Is True of Financial and Managerial