ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations
A company's board asks for a report showing expected profit for each product line under three possible sales volume scenarios for next year. Which type of accounting information is this?
This is management accounting information. It is prepared for internal decision makers, is forward-looking, and is analysed by product line and scenario, which is detail that statutory financial statements for external users do not normally contain.
- AFinancial accounting information, because it relates to profit
- BManagement accounting information, because it is internal and forward-lookingCorrect
- CStatutory audit information, because it deals with future risk
- DFinancial accounting information, because it is analysed by product
Explanation
Scenario-based forecasts by product line are produced for internal decision making and look to the future. Financial accounting reports historical results of the entity as a whole to external users, so the profit reference does not make it financial accounting.
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