Question

Financial and Managerial Accounting are the two most commonly taken accounting courses. Financial (ACCT 201) is generally required as a prerequisite for Managerial (ACCT 202). Consider and respond to each of the following: 1. Compare and contrast Financial Accounting and Managerial Accounting 2. Discuss how Managerial Accounting is used for: planning, controlling, and decision making 3. What kinds of jobs/careers are related to Managerial Accounting?

Answer 1

1) Financial and management accounting are both vital tools for a business, however serve different purposes.

--Financial accounting has primarily focus on the financial statements that are distributed to stockholders, financial analysts, lenders, and others outside of the company; on contrary managerial accounting has primarily focus on providing information within the organisation so that its management can operate the organisation more effectively

--Financial accounting is precise and is required to adhere to Generally Accepted Accounting Principles (GAAP), however management accounting is usually more of a estimate or a guess, because most managers do not have time for exact numbers when a decision needs to be made.

-- Financial accounting is meant for external stakeholders, whereas management accounting is presented internally

-- In the case of financial accounting the unit of measurement is only dollars; but in case of management accounting any unit of measurement is followed

-- Financial Accounting is based on double entry system such as recording, classification of business transaction and summarizing etc. but management accounting does not follows the double entry system

-- Financial accounting is usually prepared for one year but management accounting is prepared as and when needed.

2) A managerial accountant record financial information for their organisation that is used by the company's management team to aid in the process of decision-making. They assist their companies with financial efficiencies and help with operational costs, current and future budgets, and how company's funds should be distributed. These develop budgets, perform asset and cost management, and create significant reports that are used by the top management to aid in the decision making process and development of efficient business strategies. Executives and managers of business operations mainly rely on the role of this position for the business planning, decisions making and controlling finances

3) There are numerous jobs for management accountants. They can work as cost accountants, internal auditor, budget analysts, and financial analysts within an organization. They can also advance to positions such as chief cost accountant, accounting manager, budget manager, or director of internal auditing