Question

Compare managerial and financial accounting, include what managerial accountants management functions are.

Answer 1

Financial statements are prepared to ascertain the actual profit or loss of the firm and to know the financial position of the firm of every accounting period.

Management accounting collects data from financial statements, analyzes, and then provides this data to the management.

Financial Accounting vs Management Accounting

1 Monitory transactions are the base of financial accounting.

Data as obtained from financial accounting is the base of management accounting.

2 Recognition, classification, recording of financial transactions on actual basis, and preparation of financial statement are the main functions of financial accounting.

Collection of data from financial accounting, provision of necessary information to the management for planning, decision-making, and evaluation are the main functions of management accounting.

3 Support of relevant figures is required in preparing the financial reports.

Subjective and objective, both figures may be present in the management accounting report.

Functions of management accounting- The major functions that a manager completes can be categorized into four different functions known as planning, organizing, leading, and controlling.