Question
Question 1 Which of the following statements accurately defines management accounting: Management accounting is the identification, measurement and communication of accounting information to help managers take operational decisions. Management accounting is concerned with calculating profitability for the use of shareholders. Management accounting is concerned with providing taxation information for the government. Management accounting is concerned with providing dividends information for shareholders. 2 pts
Answer
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(329 Votes)
Alexander
Master · Tutor for 5 years
Answer
Management accounting is the identification, measurement, and communication of accounting information to help managers take operational decisions.
Explanation
The core function of management accounting involves identifying, measuring, and communicating financial information to help the management in decision making, planning, and controlling activities within an organisation. These processes primarily aim at equipping the management with the necessary financial details to sculpt effective operational strategies and meet organisational goals effectively. On the other hand, the task of calculating profitability is indeed involved in management accounting, but it is not correct to confine its functionality to just serving shareholders. Furthermore, offering taxation details to the government, as well as information about dividends to shareholders, falls under the domain of financial accounting. Thus, amongst the given options, management accounting is most accurately defined by the first option.