Difference between financial accounting and management accounting

Expert Solution

SOLUTION:

DEFINITIONS:

FINANCIAL ACCOUNTING- Financial accounting is a branch of accounting concerned with the summary ,analysis and reporting of financial transactions related to a business.

MANAGEMENT ACCOUNTING-Management accounting is a special branch of accounting,manager use the provisions of accounting information in order to better inform themselves.It helps the manager to identify,measure,analyse,interpret and communicate the required information.

PERIOD:

FINANCIAL ACCOUNTING- Financial statements are due at the end of an financial or accounting year.

MANAGEMENT ACCOUNTING-Managerial statements and reports issued many times during the year to provide manager the required information.

VALUATION:

FINANCIAL ACCOUNTING- In Financial accounting, Assets and liabilties of company are valued at proper value(either historical or depreciable)

MANAGEMENT ACCOUNTING-In Management accounting,Items are valued keeping in view the production ability.

STANDARDS:

FINANCIAL ACCOUNTING-Financial accounting must follow various accounting standards.

MANAGEMENT ACCOUNTING- This accounting is made for internal matters,hence there is no standard to compile

ekkarill92 answered 1 year ago

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