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(a)
Managerial Accounting: Managerial accounting is the process to convert business data into quantitative information. It helps to evaluate the various options available to make informed decisions.
To explain: Whether the statement “managerial accounting is a field of accounting that provides economic information for all interested parties” is correct or not.
(a)
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Explanation of Solution
The statement “managerial accounting is a field of accounting that provides economic information for all interested parties” is incorrect because it is for internal use only.
- Managerial accounting provides information only to managers and internal users in the company.
- It does not provide information to outside parties of a company like vendors or general public so this statement is incorrect.
The beneficiaries of
(b)
To explain: Whether the statement “managerial accounting serves only manufacturing firms” is correct or not.
(b)
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Explanation of Solution
The statement “managerial accounting serves only manufacturing firms” is incorrect because it is used by other types of firms also.
- Managerial accounting is useful for effective and efficient operations in business.
- Effective and efficient operations are required in every business, firm or company to achieve their goals.
- So managerial accounting is useful for other than manufacturing firms as well.
It is incorrect to say that managerial accounting serves only manufacturing firms
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Chapter 19 Solutions
Accounting Principles, Volume 1: Chapters 1 - 12
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