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True or False
1. There is no overlap between financial and managerial accounting.
2. Managerial accounting sometimes relies on past information.
3. Managerial accounting does not need to conform to GAAP
4. Financial accounting must conform to GAAP.

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Answer:

1. There is no overlap between financial and managerial accounting. FALSE, for example, sales revenue and cogs are important to both.

2. Managerial accounting sometimes relies on past information.  TRUE

3. Managerial accounting does not need to conform to GAAP  TRUE

4. Financial accounting must conform to GAAP. TRUE

Explanation:

Managerial accounting is designed to meet the needs of internal users, i.e. management, and help them to plan or make decisions regarding the firm. Financial accounting is designed for external users, e.g. shareholders, IRS, SEC, banks, etc.

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