Question

 (1) A management accountant can help formulate a strategy by

 A. providing information about the cost of a product which will help to determine which products to offer. B. providing information about historical financial results.

 C. providing information about the sources of competitive advantage, such as the cost, productivity, or efficiency advantage of their company relative to competitors.

 D. measuring business transactions that are based on generally accepted accounting principles (GAAP), which will then determine financial figures that effect managers' compensation.

 (2) How does management accounting differ from financial accounting?

 A. Management accounting measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. Financial accounting measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP).

 B. Management accounting measures, analyzes, and reports financial and nonfinancial information. relating to the costs of acquiring or using resources in an organization. Financial accounting measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization.

 C. Management accounting measures, analyzes, and reports financial and nonfinancial information relating to the costs of acquiring or using resources in an organization. Financial accounting measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP).

 D. Management accounting measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. Financial accounting measures, analyzes, and reports financial and nonfinancial information relating to the costs of acquiring or using resources in an organization.

Answer 1

Part 1 :

Option C : Management accounts contribute to strategic decisions by providing information about the sources of competitive advantage such as cost, productivity or efficiency or advantage of their company relative to competitors.

The management accountant provides the information to formulate strategies like : Who are the most important customer, their bargaining power, details about the substitute products, its features, price, etc.

Option A is not chosen because : The cost accountant is responsible for providing details about the cost, hence it is not the job of a management accountant.

Option B &D are not chosen because: The Financial Accountant is responsible for analyzing the historical financial results or measuring business transactions that are based on GAAP.

PART 2 :

Option C :

Management accounting measures, analyzes, and reports financial and nonfinancial information relating to the costs of acquiring or using resources in an organization. Financial accounting measures and records business transactions and provides financial statements that are generally based on GAAP.

Option A is not chosen because :  Management accountant not only measures & reports but also analyzes the information.

Option B is not chosen because :  A Financial accountant measures only the financial information.The non-financial information is not taken into account. Hence, this option is incorrect

Option D is not chosen because :  Financial accountant is not concerned about the costs of acquiring the resources. His role is limited to measuring & analyzing the financial information. Hence this option is incorrect.