Fujiko owns and operates a local bakery. Fujiko is leading when she:

• A. files tax returns with the government
• B. prepares financial statements for external investors
• C. audits the financial records of another company
• D. uses managerial accounting information to make decisions about expanding her product line

Answer: (D)

Verified step by step guidance

1. Understand the context of the problem: Fujiko owns and operates a bakery, and the question revolves around identifying the correct activity related to managerial accounting.
2. Review the activities listed in the problem: filing tax returns, preparing financial statements, auditing financial records, and using managerial accounting information to make decisions.
3. Clarify the concept of managerial accounting: Managerial accounting focuses on providing internal information to help business owners and managers make decisions, such as expanding product lines, budgeting, or improving operations.
4. Differentiate between the activities: Filing tax returns and preparing financial statements are related to financial accounting, which is aimed at external reporting. Auditing financial records is an external assurance activity. Using managerial accounting information is an internal decision-making process.
5. Conclude that the correct activity related to managerial accounting is Fujiko using managerial accounting information to make decisions about expanding her product line, as this involves internal decision-making based on relevant data.