Chapter 14, Problem 1QS

To determine

Managerial Accounting:

Managerial accounting represents management related activities concerned with decision making of the company.

Financial Accounting:

Financial accounting represents making of financial statements which are to be shared with the users of accounting.

Financial statements mainly include Income Statement, Balance Sheet and Cash Flow Statement.

To identify: Given descriptions relate to managerial (M) or financial (F) accounting.

Explanation of Solution

1.

Managerial accounting (M)

In managerial accounting primary users always would be the managers.

2.

Financial accounting (F)

Financial accounting contains data related to audit as well.

3.

Managerial accounting (M)

Organization, management these kinds of activities are performed under managerial accounting for organization as a whole.

4.

Managerial accounting (M)

Application of principles and practices can be changed on the basis of situation’s demand.

5.

Financial accounting (F)

Past results always considered in financial accounting for improving current position of the company.

Hence, Managerial as well as financial accounting both are crucial.