Which of the following best describes the type of information provided by managerial accounting?

• A. Financial statements prepared for external stakeholders
• B. Tax filings required by government agencies
• C. Detailed internal reports to assist management in planning and decision-making
• D. Audited reports for shareholders

Answer: (C)

Verified step by step guidance

1. Understand the distinction between managerial accounting and financial accounting. Managerial accounting focuses on providing information for internal use by management, while financial accounting is aimed at external stakeholders such as investors and creditors.
2. Review the types of reports typically generated by managerial accounting. These include budgets, forecasts, cost analyses, and performance evaluations, which are designed to assist management in planning and decision-making.
3. Consider the purpose of financial statements prepared for external stakeholders. These are part of financial accounting and are designed to provide a snapshot of the company's financial health to external parties.
4. Evaluate the role of tax filings required by government agencies. These are compliance documents and are not typically part of managerial accounting, as they are prepared for external regulatory purposes.
5. Conclude that managerial accounting is characterized by detailed internal reports tailored to assist management in operational and strategic decision-making, which differentiates it from the other options provided.