Question

Which of the following is most associated with managerial accounting?

a) must follow GAAP
b) may rely on estimates and forecast
c) is prepared for users outside the organization
d) always reports to the entire entity

Answer 1

Managerial accounting is most associated with the reliance on estimates and forecasts to aid in internal business decision-making, contrasting with financial accounting's compliance with GAAP. Therefore, the correct option is B.

Step-by-step explanation:

The aspect most associated with managerial accounting is that it may rely on estimates and forecasts. Managerial accounting is geared towards providing internal management with the information necessary to make informed business decisions. Unlike financial accounting, which is constrained by the Generally Accepted Accounting Principles (GAAP), managerial accounting is more flexible in nature, often employing projections and predictive models to aid in planning and control within an organization.