Which type of accounting information uses historical data to assist in making present decisions?

• A. Managerial accounting information
• B. Financial accounting information
• C. Forecasted accounting information
• D. Tax accounting information

Answer: (B)

Verified step by step guidance

1. Understand the types of accounting information: Financial accounting focuses on historical data, managerial accounting emphasizes future-oriented decisions, tax accounting deals with compliance, and forecasted accounting involves projections.
2. Recognize that financial accounting information is primarily concerned with recording and reporting past transactions and events, which are used to evaluate the financial performance and position of an entity.
3. Consider the purpose of historical data: It provides a reliable basis for stakeholders, such as investors and creditors, to make informed decisions about the entity's current and future financial health.
4. Compare the options provided: Managerial accounting and forecasted accounting focus on future decisions, while tax accounting is specific to tax compliance. Financial accounting is the only type that uses historical data for decision-making.
5. Conclude that the correct type of accounting information that uses historical data to assist in making present decisions is financial accounting information.