Question

For each report listed below, identify whether the report would be classified as a Management Accounting (MA) report or a Financial Accounting (FA) report.

1. study detailing sale information of the top-ten selling products __________
2. weekly report of total sales generated by each store in the metropolitan area ________
3. annual Report sent to shareholders ________
4. monthly report comparing budgeted sales by store to actual sales __________

Answer 1

The reports on sale information of top-selling products, weekly sales by store, and monthly comparisons of budgeted and actual sales are classified as Management Accounting (MA) reports because they aid internal decision-making. The annual report sent to shareholders is classified as a Financial Accounting (FA) report intended for external users.

Step-by-step explanation:

For each report listed, we can classify them as either a Management Accounting (MA) report or a Financial Accounting (FA) report based on the audience and purpose of the report. Here are the classifications:

1. A study detailing sale information of the top-ten selling products - Management Accounting
2. Weekly report of total sales generated by each store in the metropolitan area - Management Accounting
3. Annual Report sent to shareholders - Financial Accounting
4. Monthly report comparing budgeted sales by store to actual sales - Management Accounting

Management Accounting reports are internal reports, intended to help managers make decisions, while Financial Accounting reports are external reports, prepared for shareholders and other stakeholders.