Final answer:
True. An accounting system should indeed generate both internal and external reports to aid decision-making for management and to inform stakeholders outside the organization about the company's financial status.
Step-by-step explanation:
True or False: An accounting system should generate both internal and external reports. This is a true statement. An effective accounting system is designed to provide financial information that is useful for a variety of stakeholders, including those both inside and outside the organization. Internal reports, such as budget performance reports and cost analysis, help management make decisions about the daily operations of a company. External reports, like financial statements and tax returns, are critical for investors, creditors, and regulatory agencies to assess the financial health and compliance of a business.