Multiple Choice
Which two terms are directly associated with the way an annuity is funded?
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1. Introduction to Accounting
Types of Accounting
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Which type of accounting is primarily concerned with providing information to internal users for decision-making purposes?
A
Tax accounting
B
Financial accounting
C
Managerial accounting
D
Auditing
Verified step by step guidance1
Understand the different types of accounting: Tax accounting focuses on compliance with tax laws, Financial accounting provides information to external users like investors, and Managerial accounting is designed for internal users to aid in decision-making.
Recognize that the question is asking about the type of accounting that serves internal users, such as managers, for planning, controlling, and decision-making purposes.
Recall that Managerial accounting involves creating budgets, forecasts, and performance reports to help internal stakeholders make informed decisions.
Eliminate the other options: Tax accounting is for tax compliance, Financial accounting is for external reporting, and Auditing is for verifying the accuracy of financial records.
Conclude that the correct answer is Managerial accounting, as it aligns with the purpose of providing information to internal users for decision-making.
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