Q1SE_e - 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):

e. Reports audited annually by independent certified public accountants.

Step-by-Step Solution

Answer

Financial accounting is involved in the audit of reports annually.

Step 1: Definition of Audit

An audit is defined as an official inspection of the financial accounts of a business organization, by an independent body.

Step 2: Identification of accounting

The correct option is financial accounting

The audit is done of the financial statement of the company to check the reliability of the financial statements. Financial accounting helps in the preparation of financial statements.