Question

The primary purpose of managerial accounting is to prepare financial statements in accordance with a reporting framework (e.g. GAAP). True or false?

Answer 1

Answer:

False.

Explanation:

There is no specific rule for managerial accounting like GAAP. GAAP is the accounting principles set for financial accounting and not managerial accounting. The main and primary purpose of managerial accounting is to help the managers of an organization to analyze the exact cost that is incurred in the production of sale-able goods and services. This accounting is done completely as per the convenience and discretion of the managers of a company and not by any specified rules and norms.