BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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(i) true and (ii) is false
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(ii) is true and (i) is false
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Both are true
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Both are false
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Detailed explanation-1: -Which of the following statements is/are correct? (i) Information for decision-making should incorporate uncertainty in some way. (ii) The data used to prepare financial accounts and management accounts are the same. The answer given is C.
Detailed explanation-2: -In management accounting, decision‑making may be simply defined as choosing a course of action from among alternatives. If there are no alternatives, then no decision is required. A basis assumption is that the best decision is the one that involves the most revenue or the least amount of cost.
Detailed explanation-3: -Managerial accounting helps managers make operational decisions–intended to help increase the company’s operational efficiency–which also helps in making long-term investment decisions.
Detailed explanation-4: -For example, a small business owner may be considering whether to make or buy a component needed to manufacture the company’s primary product. By completing a make or buy analysis, she can determine which choice is more profitable.
Detailed explanation-5: -Accounting information system is the vital system to all organizations to make decision (Wilkinson et al., 2000). Accounting information helps for decision makers to understand their tasks more clearly and reduce uncertainty before making their decisions (Chong, 1996).