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Which branch of accounting prepares the external reports used by lenders, suppliers, investors and government agencies?
AManagerial accounting
BCost bookkeeping
CTrial balance work
DFinancial accounting
Answer & Solution
Correct answer: D. Financial accounting
1. The accounting system generates two kinds of report, internal and external.
2. Financial accounting prepares the external reports, which are used mainly by lenders, suppliers, investors and government agencies.
3. Managerial accounting is the internal side: it gives managers inside the firm information for decisions about current and future operations.
4. Trial balance work and cost bookkeeping are steps inside the record keeping, not the branch that reports to outsiders.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.1 Accounting: More than Numbers_
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