Financial statements differ from management account because
Correct answer: A. They are mainly prepared for external users of financial information
- A. They are mainly prepared for external users of financial information
- B. They are more complex and hard to prepare
- C. The are the summary of accounting data
- D. The are prepared on basis of actual concept Accounting & Auditing
Explanation
Financial statements are designed mainly for external users such as investors, creditors and government agencies, whereas management accounts support internal planning and control. Being a summary of accounting data is also a feature of financial statements, but it is not the key distinction here.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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