Which of the following statements is not true?

Multiple Choice

• Financial accounting would be used by outside auditors or investors.

• Managerial accounting is primarily geared towards external parties.

• Both financial and managerial accounting use the same underlying data.

• Managerial accounting is not governed by generally accepted accounting principles.

39. The Belview Company has two divisions--East and West. The divisions have the following revenues and expenses:

East -- West-----

Sales ........................ $275,000 $250,000

Variable costs .............. 138,000 100,000

Direct fixed costs ......... 90,000 75,000

Allocated corporate costs..... 85,000 68,000

Net income (loss) ............. (38,000) 7,000

The management of Belview is considering the elimination of the East Division. If the East Division were eliminated, the direct fixed costs associated with this division could be avoided. However, corporate costs would still be the same. Given these data, the elimination of the East Division would result in a new company net income (loss) of:

Multiple Choice

• $45,000

• $7,000

• ($47,000)

• ($78,000)