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ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations

Which of the following best describes the scope of information typically found in management accounting compared with financial accounting?

Management accounting may include non-financial information, such as quantities or hours, and can analyse results by product, department or customer to help managers make decisions. Financial accounting is mainly monetary, historical and presented for the entity as a whole in a prescribed format.

  1. AManagement accounting provides only monetary information about the whole entity
  2. BManagement accounting may include non-financial information and analysis by product, department or customerCorrect
  3. CManagement accounting is limited to historical data
  4. DManagement accounting always uses the same format as the statement of profit or loss

Explanation

Management accounting is not restricted to money or to historical data and can analyse results by segment, using measures such as units or time. Financial accounting focuses on monetary information for the entity as a whole in a prescribed format.

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