ACCA Applied Knowledge · Business and Technology · Financial information provided by business
Which of the following users is most likely to rely mainly on management accounting information rather than published financial statements?
A divisional manager setting next quarter's prices relies mainly on management accounting, because this is an internal, short-term decision needing detailed, timely and forward-looking cost data. Banks and shareholders are external users who typically depend on the published financial statements.
- AA bank considering a loan to the company
- BA divisional manager deciding on next quarter's product pricingCorrect
- CA shareholder deciding whether to sell shares
Explanation
Divisional managers are internal users who need detailed, timely and forward-looking data for decisions such as pricing. Banks and shareholders are external users who rely mainly on published financial statements.
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