In: Accounting
Create a comparing table for managerial and financial acoounting on the positions you concider the most important. Supply your choice with explanations.
Basis | Financial Accounting | Managerial Accounting |
Meaning | Recording, classifying, summarising and interpret the financial record of the company | Management accounting helps the management in decision making about business |
Scope | Its scope is limited | Its scope is much broader |
Application | it shows the true and fair view of the financial position of the company | It helps the management on how to achieve the desired result by taking meaningful steps and strategy |
Dependence | Financial accounting does not depend on management accounting | Management accounting is entirely depended on financial accounting to take the right decision |
Statutory Requirement | It is legally mandatory to prepare financial accounts as per company and income tax laws | Management accounting has no statutory requirement. it entirely depends on management needs. |
Format and presentation | Fixed and specific formats per accounting standards used for presenting and recording information. |
No fixed or set format is available for presentation |
User | mainly for the investor, stakeholder, and potential investors | Only for Mangement |
Rules | Financial accounting is prepared as per GAAP and IFRS | No rules for Mangement accounting |
Basis of decision making | Historical data are the base for taking the decision | Historical and prediction information used for decision making |