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ACCA Applied Knowledge · Management Accounting · Accounting for management

Ridge Co's management accountant prepares a report for the board. Which of the following describes information that would be classed as management accounting rather than financial accounting?

A rolling cash flow forecast by product line to support a pricing decision is management accounting information. It is internal, forward-looking and tailored to a specific decision, whereas the statement of financial position, cash flow statement and related party note belong to published IFRS financial statements.

  1. AA statement of financial position at the year end prepared under IFRS
  2. BA statement of cash flows included in the published annual report
  3. CA rolling forecast of next quarter's cash flows by product line, produced to support a pricing decisionCorrect
  4. DA note to the financial statements disclosing related party transactions

Explanation

A forecast by product line to support a decision is internal, forward-looking and tailored to management needs. The other three items are components of published, IFRS-based financial statements for external users.

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