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ACCA Applied Knowledge · Management Accounting · Accounting for management

Which of the following statements about the main users of financial accounting and management accounting information is correct?

Management accounting mainly serves internal managers who need information to plan, control and make decisions, while financial accounting mainly serves external users such as shareholders, lenders and tax authorities. The other statements reverse this split or wrongly limit both to tax authorities.

  1. AManagement accounting is aimed mainly at external users such as lenders and investors
  2. BFinancial accounting is aimed mainly at internal managers who need detailed operational data
  3. CManagement accounting is aimed mainly at internal managers, while financial accounting serves mainly external usersCorrect
  4. DBoth are aimed solely at tax authorities

Explanation

Financial statements are produced mainly for external stakeholders such as investors, lenders and tax authorities. Management accounting serves managers inside the entity. The reverse statements in the other options are wrong.

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