Question

Management accounting is considered successful when it:

A) helps creditors evaluate the company's performance
B) helps managers improve their decisions
C) is accurate
D) is relevant and reported annually

Answer 1

Option (B), Management accounting is successful when it aids managers in improving their decision-making process, aligning with the internal focus of this branch of accounting.

Step-by-step explanation:

Management accounting is deemed successful when it helps managers improve their decisions. This field of accounting is more focused on providing internal managers with relevant information to make informed operational and strategic decisions rather than supplying information to external parties such as creditors, bondholders, and shareholders.

While accuracy in management accounting is critical, its main goal is to be relevant, timely, and facilitate internal decision-making to enhance company operations and strategy. Although information on a company's products, revenues, costs, and profits become more widely available and could influence external investors, this doesn't directly pertain to the success criteria of management accounting itself.