Question

What are some of the instances where managerial reports can be used for external financial reporting?

Answer 1

Answer: External financial statements present an accurate, complete, and readily understandable picture of the company's financial condition. The company publishes income statement and balance sheet at the end of every financial year and such statements are mainly used by lenders, creditors, and investors to know the performance of a business, as well as its ability to repay debts. Managerial accounting calculates the costs of articles that they manufacture. All raw material costs, labor, overhead, and any added costs are taken into deliberation. These totals are divided by the amounts of goods produced. On this basis the profit margins are estimated and monitored through such reports. Performance-related managerial accounting reports also provide deep insight into the working for external financial reporting