Question

Question: Identify whether each description most likely applies to managerial (M) or financial (F) accounting.

1. Its primary users are company managers.
2. Its information is often available only after an audit is complete.
3. Its primary focus is on the organization as a whole.
4. Its principles and practices are very flexible.
5. It focuses mainly on past results.

Short answer

Answer

S.no.	Description	Accounting
1	Its primary users are company managers	M
2	Its information is often available only after an audit is complete	F
3	Its primary focus is on the organization as a whole	F
4	Its principles and practices are very flexible	M
5	It focuses mainly on past results	M

Step-by-step solution

Meaning of Managerial Accounting

Managerial accounting is a part of accounting that assists the management by creating reports, statements, and other documentsto make various decisions on business matters.

Identifying each description

S.no.	Description	Accounting	Explanation
1	Its primary users are company managers	Managerial Accounting	The stockholders and creditors are the main consumers of financial accounting. The organization's managers, officers, and staff are the main users of management accounting.
2	Its information is often available only after an audit is complete	Financial Accounting	Financial accounting uses generally known accounting concepts to create financial statements. It emphasizes earlier outcomes. An audit is necessary for financial statements to provide stakeholders with fair information.
3	Its primary focus is on the organization as a whole	Financial Accounting	An accounting report summarizes and presents a company's financial condition to the parties interested in it, such as stockholders, creditors, governmental bodies, and suppliers.
4	Its principles and practices are very flexible	Managerial Accounting	Principles and practices are to be flexible to help managers achieve their organization's objectives; the area of management accounting is founded on concepts and principles that revolve around the procedures for identifying, evaluating, assessing, presenting, and reporting financial information to managers.
5	It focuses mainly on past results	Managerial Accounting	In managerial accounting, performance is analyzed previously, and forecasts are based on it.