Question

Explain how you believe managerial accounting differs from financial accounting. Which do you believe is more valuable to the business and why?

Answer 1

Answer: Difference between Managerial accounting and Financial accounting-

Headings	Managerial accounting	Financial accounting
Definition	It is used for internal purpose of business so that managerial decisions can be taken.	It is used for internal and external both purpose, it is specially for financial reporting.
Information	It contains monetary and non monetary both information.	It contains only monetary information.
Objective	Its objectives are budgeting, planning and managerial decision making.	Its objective is to provide true and fair picture of any company to the stakeholders.
Preparation	Managerial reports, budget, cost sheet etc. can be prepared any time as per the need and requirement.	Financial statements are prepared quarterly, half yearly, annually or at the end of accounting period/financial year.
Auditing	Reports are not published and audited.	Financial statements are strictly published and audited by internal and external auditors.
Valuation	It does not provide such valuations, It rather evaluates the productivity.	It provides valuation of firm, assets and liabilities, it includes impairment, depreciation, revaluation etc.

Valuable and important- Both are very important for any business but Financial Accounting has more importance than Managerial accounting because financial accounting analyzes the financial statements of the company, it shows the real and transparent picture of the company to stakeholders. It helps in increasing company's business and profitability. It also helps in preventing fraud.