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CMA Intermediate · Management Accounting · Introduction to Management Accounting

Which statement best describes an advantage of management accounting that is NOT achieved by financial accounting alone?

Management accounting provides forward-looking, segment-wise information like product-wise contribution that managers use for decisions. Financial accounting focuses on historical, statutory reporting, audit and standards compliance, so the other options describe financial accounting, not an advantage unique to management accounting.

  1. APreparation of the statutory balance sheet
  2. BProvision of forward-looking, segment-wise information such as product-wise contribution for decision makingCorrect
  3. CVerification of the accounts by a statutory auditor
  4. DCompliance with accounting standards in published statements

Explanation

Management accounting supplies tailored, forward-looking and segmental information such as product contribution to help decisions. The other options are features of financial accounting and statutory reporting.

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