Question

In: Accounting

Create a comparing table for managerial and financial acoounting on the positions you concider the most...

Create a comparing table for managerial and financial acoounting on the positions you concider the most important. Supply your choice with explanations.

Solutions

Expert Solution

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

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