In: Accounting
2 Distinguish between management accounting and financial accounting.
Hint:
- Meaning of Managerial Accounting and Financial Accounting
- Definitions of Managerial Accounting and Financial Accounting
- Differences between ‘Financial Accounting’ and ‘Managerial Accounting’
- Conclusion
Answer : Distinguish between management accounting and financial accounting are as follows -
1. Meaning of Managerial Accounting and Financial Accounting :
Managerial Accounting : concerned with operational reports, which are only distributed within a company
Financial Accounting : reports on the profitability of a business
2. Definitions of Managerial Accounting and Financial Accounting :
Managerial Accounting : Management accounting also is known as managerial accounting and can be defined as a process of providing financial information and resources to the managers in decision making. Management accounting is only used by the internal team of the organization, and this is the only thing which makes it different from financial accounting.
Financial Accounting : Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
3. Differences between ‘Financial Accounting’ and ‘Managerial Accounting’
There are a number of differences between financial and managerial accounting, which fall into the following categories:
4. Conclusion :