Question

On what needs do (1) management accounting and (2) financial accounting focus?

a) (1) Internal decision-making; (2) External stakeholders' information
b) (1) External stakeholders' information; (2) Internal decision-making
c) (1) Recording financial transactions; (2) Project management
d) (1) Project management; (2) Recording financial transactions

Answer 1

Management accounting focuses on internal decision-making, while financial accounting focuses on external stakeholders' information.

Step-by-step explanation:

(1) Management accounting focuses on internal decision-making within a company. It provides information to managers and helps them make informed decisions about resource allocation, cost management, and performance evaluation. It involves the use of tools such as budgeting, forecasting, and variance analysis.

(2) Financial accounting focuses on providing external stakeholders' information about a company's financial performance, position, and cash flows. It follows Generally Accepted Accounting Principles (GAAP) and includes preparing financial statements like the income statement, balance sheet, and cash flow statement.

Therefore, the correct answer is a) (1) Internal decision-making; (2) External stakeholders' information.