Managerial accounting differs from financial accounting in t

Managerial accounting differs from financial accounting in that managerial accounting A. is used primarily by external decision makers. O B. tends to report on the company as a whole rather than segments of the company ° C. emphasizes data relevance over data objectivity O D. is required by Generally Accepted Accounting Principles (GAAP).

Solution

Hello Dear,

Answer for the above question is (C) i.e. emphasizes on data relevance over data objectivity.

Managerial accounting emphasizes on the relevance of the data as it provides the maximum aid in management decision, while financial accounting emphasizes on the reliability and objectivity of fnancial information.

In the explanation of my answer, option (a) is that managerial accounting is used by external decision makers, which it is totally incorrect, as financial accounting is used by both internal and external decision makers, but managerial accouting is used only for internal decision makers.

option (b) is that managerial accounting tends to report on company as a whole, it is incorrect as financial accounting only report on company as a whole while manageral accounting reports on each segment of the company, it foccuses on each division.

option (d) is that managerial accounting is required by generally accepted accounting principles, it is incorrect, as there is no requirement as such in GAAP of managerial accounting, GAAP only requires financial accounting.