28.03.2023 - 16:34

Financial accounting is broader in scope than management accounting. a. True b. False

Question:

Financial accounting is broader in scope than management accounting.

a. True

b. False

Answers (1)
  • Gertrude
    April 11, 2023 в 16:51
    a. True. Financial accounting is broader in scope than management accounting because it involves the preparation and presentation of financial statements to external stakeholders like investors, creditors, and regulators. These statements are prepared based on generally accepted accounting principles (GAAP) and provide an overall view of the financial health and performance of the organization. On the other hand, management accounting primarily focuses on providing financial information to internal stakeholders for decision-making and internal control purposes. It involves the preparation of reports and analysis for the management team to aid them in decision-making processes such as budgeting, forecasting, and cost analysis. Therefore, financial accounting has a wider scope because it encompasses all financial transactions of an organization, while management accounting is narrower in scope because it focuses on the internal financial management of an organization.
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