Managerial Accounting Chapter 1 questions with correct answers

Define managerial accounting: Correct Answer-Managerial accounting is defined as the activities carried out in a firm that provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions. What does managerial accounting focus on? Correct Answer-Managerial accounting focuses on internal users. Define financial accounting: Correct Answer-Financial accounting is an information-processing system that generates general-purpose reports of financial operations and financial position for an organization. What does financial accounting focus on? Correct Answer-Financial accounting focuses on external users. It is used by decision makers inside and outside the firm, but it typically emphasizes external users, such as security investors, analysts, and lenders. What is a "flaw" in financial accounting? Correct Answer-Financial accounting has information that does not provide enough data. It reports on past decisions. The cost of individual products or services are rarely detailed enough in overall financial statements to provide the information needed for decisions concerning the factors that influence cost. Is financial information good for day-to-day decisions? Correct Answer-Internal decision makers often find that the information provided in financial statements of limited value in managing day-to-day operating activities.