What are the major differences between managerial and financial accounting?
Homework Answers
Answer
- Managerial accounting and Financial accounting are two different concepts:
Some of the key point of differences are mentioned below in a summarised format—
|
Points of difference |
Managerial accounting |
Financial Accounting |
|
|
1 |
Purpose |
To assist in internal decision making and management |
To assist in determining Net Income/Loss and Financial position of business. |
|
2 |
Users of information provided |
Managers, Internal management. |
Stockholders, Investors, Governmenet agencies. |
|
3 |
Statements prepared |
Contribution income statement, Cost benefit analysis, Budgets, etc |
Income Statement, Balance Sheet, Statement of Cash Flows |
|
4 |
Concept used |
Variable / Marginal costing |
Traditional / Absorption costing. |
|
5 |
Application of Accounting Standards |
Not applicable |
Strictly applicable |
|
6 |
Concept of Opportunity Cost |
Very relevant under managerial accounting |
Not considered under Financial Accounting |
Add Answer to:
What are the major differences between managerial and
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Please list at least 5 major differences between Managerial and Financial Accounting. Include in your discussion who the important players are in each, who is using the information, and what type of information is everyone focused on. Please explain why each type of accounting (managerial and financial) plays an important role in the organization.
Discussion Questions 1. What are the major differences between managerial accounting and financial accounting? 2. a....
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Please list at least 5 major differences between Managerial and Financial Accounting. Include in your discussion who the important players are in each, who is using the information, and what type of information is everyone focused on. Please explain why each type of accounting (managerial and financial) plays an important role in the organization.
Discussion Questions 1. What are the major differences between managerial accounting and financial accounting? 2. a. Differentiate between a department with line responsibility and a department with staff re- sponsibility. b. In an organization that has a Sales Department and a Personnel Department, among others, which of the two departments has (1) line re- sponsibility and (2) staff responsibility? 3. What manufacturing cost term is used to describe the cost of materials that are an integral part of the manufactured...
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