LO 1.2Which of the following statements is incorrect?

The practice of management accounting is fairly flexible.

The information gathered from management accounting is not required by law.

Management accounting focuses mainly on the internal user.

Reports produced using management accounting must follow GAAP.

Answer: Reports produced using management accounting must follow GAAP.

Explanation: Management report are reports produced by management accountants are prepared for internal use by managers, employees and other officers.

Management reports are produced as at when required and do not necessarily have to follow GAAP.

Management reports include job costs, production cost report, cost of good manufactured report etc.

It gives monetary and non monetary information for management consumption.