Alan, an accountant in a law firm, is summarizing his company's expenses and revenue in the form of an income statement. However, he has been told that the statement is being prepared for the business's internal audience alone, that is, the firm's management authorities. Which title should Alan give the income statement?

Question

Business

Ruben Ryan

22 May, 02:15

Alan, an accountant in a law firm, is summarizing his company's expenses and revenue in the form of an income statement. However, he has been told that the statement is being prepared for the business's internal audience alone, that is, the firm's management authorities. Which title should Alan give the income statement?

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Answers (1)

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Haiden Saunders · Answer 1

Answer: Management Account

Explanation:

In accounting Financial statements are usually prepared for a wide range of user e. g management, investors, financial institutions, financial analysts, employees, tax authority, government etc the list is endless.

Financial Accounting can be defined as the process of identifying, classifying, Analyzing, summarizing, interpretation and communication of financial information so end users can make informed decisions.

Management Accounting is the process of classifying, analyzing and interpreting information to management for decision making, control and planning. It guides management so if an account is prepared for internal users of the organization it's a Management Account.

When it includes Income and Expenses it's a Budget which is an estimate of income and expenses for a period.