BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Managerial accounting is concerned with providing information to managers i.e. people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside an organization.

Detailed explanation-2: -The external publication of financial statement makes it very necessary to follow regulation to provide correct information. Managerial accounting reports are shared internally only and are, therefore, not subject to such rules and regulations and are not required by laws to follow any accounting standard.

Detailed explanation-3: -Managerial accounting focuses on an organization’s internal financial processes, while financial accounting focuses on an organization’s external financial processes. Managerial accountants focus on short-term growth strategies relating to economic maintenance.

Detailed explanation-4: -The economic entity principle states that the recorded activities of a business entity should be kept separate from the recorded activities of its owner(s) and any other business entities.

Detailed explanation-5: -The answer is letter D. Managerial accounting need not follow GAAP while Financial accounting shoud follow GAAP. D represents the correct answer i.e. Managerial accounting does not has to be based on international or local accounting standards while Financial accounting shoud follow GAAP or IFRS.