Question

Describe the differences between financial accounting and management accounting.in hospital management ?

Answer 1

Financial accounting refers to the aggregation of accounting information into financial statements, while managerial accounting refers to the internal processes used to account for business transactions. There is also a difference in the accounting certifications typically found in each of these areas. People with the Certified Public Accountant designation have been trained in financial accounting, while those with the Certified Management Accountant designation have been trained in managerial accounting.

Financial accounting is concerned with the principles, practices and systems employed to compile transactions of an entity and present financial information for use by an entity’s internal and external stakeholders. Managerial accounting on the other hand is done to help its managers make business decisions that affect the entity’s future profits and cash flows. Understanding both financial accounting and managerial accounting is crucial to have a well developed understanding of business for a management executive. The average business school student will be exposed to both financial accounting and managerial accounting concepts during their program, including those involving budgeting and long-term financial planning. The average student majoring in Accounting will complete courses not only in financial accounting and managerial accounting but also other topics such tax accounting (or taxation), auditing, international taxation, MIS, etc.