Question

• What are the main differences in the role of financial accounting and managerial accounting?

Answer 1

Answer

There are some differences between managerial and finance accounting, which are as follows: Financial accounting deals more with the reporting of data to creditors, stockholders, and regulators. The reports used in financial accounting are financial statements, which are quarterly and annually and used for general purpose. These reports are related to the business as a whole and are generally accepted accounting principles (GAAP) and can by audited by a CPA.

Managerial accounting on the other hands deals in providing information that will be used in the business and assists business managers to do theses activities, which are planning, directing, and controlling. Officers, and managers use the reports internally and there is no independent auditing.

Financial Accounting Term or Concept Managerial Accounting Managerial accounting is used to supply managers of corporations with the necessary information to make decisions regarding performance and planning What is the primary purpose of the accounting system? Financial accounting is used to present the financial status of corporations to external parties Balance sheet, income statement, statement of cash Reports are based on the type of business. They flows and other notes that will help provide information to support external decision making can include anything from budget plans, benchmark studies, or financial projections Managers, suppliers, customers, auditors, and anyone a part of the value change Any part of the value chain of a departments, products, suppliers, and customers What are the types of reports produced? Who are the primary users What portion of the company is the primary focus? Managers and external users company, certann The entire company Annually, quarterly, or monthly. Typically, quarterly Any time period the company wished to evaluate What time periods are included? or annually are most used. Are there any requirements for the Finanical accounting is required by law and must standards of report presentation? follow GAAP and IFRS Days, weeks, months, quarters, or annual. Managerial accounting is not a required practice