16-1SE_d - Horngren'S Financial And Managerial Accounting

Question

Comparing managerial accounting and financial accounting 

For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA):

d. Reports must follow Generally Accepted Accounting Principles (GAAP).

 

Step-by-Step Solution

Answer

In Financial Accounting, the reports must follow the GAAP.

Definition of GAAP

GAAP stands for Generally Accepted Accounting Principles which are the guidelines that companies must comply 

Identification of accounting

The correct option is financial accounting.

Financial accounting is the branch of accounting that helps in preparing the financial statement for a company. The preparation of financial statements must comply with the generally accepted accounting