Question

Which of the following statements is correct? Multiple Choice An accounting system is suitable for a...

Which of the following statements is correct?

Multiple Choice

  • An accounting system is suitable for a firm as long as the system complies with GAAP.

  • When accounting information is used for internal purposes, a company is not required to comply with specific external accounting standards.

  • Managerial accounting information should be as accurate as the technology allows.

  • Financial and managerial accounting are identical, only the users are different.

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Answer #1

Answer is b. When accounting information is used for internal purposes, a company is not required to comply with specific external accounting standards.

It is because when the accounting is used for internal purposes it can be used by making any kind of modifications to make decisions. It need not comply with standards as is a case of managerial accounting

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