Question

match each of the following characteristics that describe financial accounting, managerial accounting, both financial and managerial accounting, or neither financial nor managerial accounting.
a. financial accounting
b. managerial accounting
c. both financial and managerial accounting
d. neither financial nor managerial accounting

1. is future - oriented
2. is used primarily for external parties
3. is relied on by outside investors
4. is flexible as to content
5. has reports that can be obtained through the company website or requested from the company (10 - k for publicly traded companies)
6. is required to be prepared by the company as a whole
7. uses reports that may be created daily or even in real - time
8. is used mostly by managers within the company
9. must be accurate to help the users make decisions
10. is always available on the internet to any interested party

Explanation:

1. Follows standards: Financial accounting must adhere to GAAP/IFRS, while managerial accounting has no mandatory standards.
2. Internal primary focus: Managerial accounting is made for internal managers.
3. Used for decisions: Both types provide info for decision-making (external for financial, internal for managerial).
4. Historical focus: Financial accounting reports past transactions; managerial can focus on future.
5. External reports (company-wide): Financial accounting issues external, full-company reports.
6. Company-wide focus: Financial accounting reports on the entire business; managerial can focus on segments.
7. Daily/weekly internal reports: Managerial accounting produces frequent internal operational reports.
8. Used by internal managers: Managerial accounting is intended for internal management use.
9. Accessible to external decision-makers: Financial accounting information is shared with external stakeholders (investors, creditors).
10. Available to any external party: Financial accounting statements are public/available to external parties; managerial is confidential.

Answer:

1. A. Financial accounting
2. B. Managerial accounting
3. C. Both financial and managerial accounting
4. A. Financial accounting
5. A. Financial accounting
6. A. Financial accounting
7. B. Managerial accounting
8. B. Managerial accounting
9. A. Financial accounting
10. A. Financial accounting