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ACCA Applied Knowledge · Business and Technology · Financial information provided by business

A company's production manager asks for a weekly report on machine downtime and cost per unit by product line. Which statement about this report is correct?

This is management accounting information. It is produced for an internal user, covers detailed operational and non-financial data such as downtime, is frequent and has no prescribed format. It is not subject to statutory audit or filing, which apply to published financial statements.

  1. AIt is management accounting information, because it is produced for internal use and has no prescribed formatCorrect
  2. BIt is financial accounting information, because it contains cost data
  3. CIt must be audited and filed with the regulator because it contains cost data

Explanation

A weekly, detailed report for an internal manager, including non-financial data such as downtime, is typical management accounting. Containing cost data does not make it financial accounting, and there is no legal requirement to audit or file it.

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