Lesson 3

Question 1

How Financial Accounting Differs From Managerial Accounting?

Answer 1

Their differences primarily center around compliance, accounting standards, and target audiences.

Question 2

The main objective of managerial accounting is

Answer 2

to produce useful information for a company’s internal use.

Question 3

The final accounts or financial statements produced through _______ are designed to disclose the firm’s business performance and financial health.

Answer 3

financial accounting

Question 4

If managerial accounting is created for a company’s management, financial accounting is created for its __________.

Answer 4

investors, creditors and industry regulators

Question 5

There is no centralized system regulating reports,

Answer 5

Managerial Accounting

Question 6

reports are highly regulated, especially the income statement, balance sheet, and cash flow statement. Since this information is released for public consumption and is highly anticipated by investors,

Answer 6

Financial Accounting

Question 7

The Financial Accounting Standards Board (FASB), under the aegis of the Securities and Exchange Commission (SEC), establishes financial accounting rules in the United States. The sum of these rules is referred to as _______.

Answer 7

generally accepted accounting principles (GAAP).

Question 8

reports tend to be aggregated, concise, and generalized. Information is simultaneously more transparent and less revealing.

Answer 8

Financial Accounting

Question 9

reports are highly detailed, technical, specific, and often experimental. Firms are always looking for a competitive advantage, so they examine a multitude of information that could seem pedantic or confusing to outside parties.

Answer 9

Managerial Accounting

Question 10

must conform to certain standards, in accordance with GAAP as a requisite for maintaining their publicly traded status.

Answer 10

Financial Accounting