Which type of accounting primarily focuses on analyzing and reporting financial information to help internal users, such as managers, make informed business decisions?

• A. Auditing
• B. Tax Accounting
• C. Managerial Accounting
• D. Financial Accounting

Answer: (C)

Verified step by step guidance

1. Understand the different types of accounting: Financial Accounting focuses on external reporting to stakeholders like investors and creditors, while Managerial Accounting is designed for internal users like managers to make informed decisions.
2. Recognize that Auditing involves examining financial records to ensure accuracy and compliance, and Tax Accounting deals with preparing and reporting tax-related information.
3. Identify the purpose of Managerial Accounting: It provides detailed financial and non-financial information, such as budgets, forecasts, and performance reports, to assist managers in planning, controlling, and decision-making.
4. Compare the focus of Managerial Accounting with Financial Accounting: Managerial Accounting emphasizes internal decision-making, whereas Financial Accounting emphasizes external reporting.
5. Conclude that the type of accounting primarily focused on analyzing and reporting financial information for internal users, such as managers, is Managerial Accounting.