Which of the following are NOT the key functions of management accounting?

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BlackTom AI · Accepted Answer

The question asks which item is NOT a key function of management accounting, so we will evaluate each option in turn to distinguish between management accounting tasks and other related accounting functions.
Option 1: 'Measure and report financial and non-financial performance to management and other stakeholders' This aligns directly with management accounting, as it focuses on internal decision-support metrics and reports that aid management in planning, controlling, and evaluating performance. The inclusion of non-financial metrics also reflects the broader scope of management accounting beyond pure numbers.
Option 2: 'Record business transactions and prepare financial statements for external users' This activity is characteristic of financial accounting, not management accounting. Recording transactions and producing external financial statements are aimed at external stakeholders such as investors, creditors, and regulators, and are governed by standards like IFRS or GAAP. Therefore, this option does not represent a key function of management accounting.
Option 3: 'Control operations and ensure the efficient use of resources' Controlling operations and resource utilization is a core management accounting function. It involves monitoring performance, budgeting, variance analysis, and facilitating corrective actions to improve efficiency and effectiveness within the organization.
Option 4: 'Inform strategic decisions and formulate business strategy' Providing information to support strategic decision-making is central to management accounting. It includes long-term planning, scenario analysis, and strategic cost management to guide the direction of the business.
Option 5: 'Plan long, medium and short-run operations' Planning across different time horizons is a fundamental activity in management accounting. It includes budgeting and forecasting to align resources with organizational goals over various time frames.
In summary, options 1, 3, 4, and 5 describe functions typical of management accounting, emphasizing internal decision support, control, strategy, and planning. Option 2 describes recording and reporting for external users, which is the domain of financial accounting rather than management accounting. Therefore, option 2 is the NOT-the-key-function-of-management-accounting statement.

LC Decision Making & Control 32181 Week 1 Quiz: Introduction to MA

Which of the following are NOT the key functions of management accounting?

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