Question

define financial management. What are some other examples of the differences between financial management and financial accounting? Give examples.

Answer 1

Financial Management is all about how funds flow in and out of a business, how significant it is when it comes to recognizing the revenues, how important it is for working capital in order to ensure the operating efficiency, and how to maintain the finance to run the business based on a going concern. Financial Accounting is about relating the debits and credits, constructing the financial statements, following the accounting principles, recognizing the standards and applying the same and maintenance of the books of records. For an example, budgeting, forecasting, planning for reinvestment, decisions like whether to issue bonus shares, dividends etc are part of financial management. In Accounting, you'd identify the nature of a transaction, you'd process through the trade life cycle, capture the same, record and make it as an evidence.