Question

Which of the following statements is INCORRECT?

A) Managerial accounting is used to prepare budgets.
B) Managerial accounting is used to determine the cost of products and services.
C) Managerial accounting is used to plan and control business operations.
D) Managerial accounting is used to report the company's financial position and results of
operations to creditors and investors.

Answer 1

The incorrect statement is that managerial accounting is used to report the company's financial position to external creditors and investors, which is actually the role of financial accounting.

Step-by-step explanation:

The statement that is INCORRECT is D) Managerial accounting is used to report the company's financial position and results of operations to creditors and investors. Managerial accounting is primarily focused on providing information for internal use by managers, not external reporting. While managerial accounting includes preparing budgets (A), determining the cost of products and services (B), and planning and controlling business operations (C), the role of reporting financial information to external parties such as creditors and investors falls under the domain of financial accounting.