ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions
Which of the following best distinguishes management accounting from financial accounting within the finance function?
Management accounting is mainly produced for internal users and has no legally required format, so it can be tailored and forward-looking. Following IFRS, public filing and reporting to shareholders describe financial accounting, which is the external, regulated side of the finance function.
- AManagement accounting is mainly for internal users and is not legally required to follow a set formatCorrect
- BManagement accounting must follow IFRS and be filed publicly
- CManagement accounting reports only on past events for shareholders
Explanation
Management accounting serves internal managers, can be forward-looking and takes whatever format is useful. Financial accounting is the one bound by IFRS and statutory filing for external users, so the other options describe financial accounting.
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