Question

A Financial accounting information and managerial accounting information have a number of distinguishing characteristics. To submit your answer, number your answer space 1 through 10 (corresponding to the numbering of the items below). For each of the characteristics listed below, indicate which characteristics are more closely related to financial accounting by placing the letter "F" in the space to the left of the item and indicate those characteristics which are more closely associated with managerial accounting by placing the letter "M" to the left of the item. 1 General-purpose reports 2. Reports are used intermally Prepared in accordance with generally accepted accounting principles 3. Special purpose reports 4. 5. Limited to historical cost data 6 Reporting standard is relevance to the decision to be made 7 Financial statements 8 Reports generally pertain to the business as a whole 9 Reports generally pertain to subunits 10 Reports issued quarterly or annually (B Useing ALL of the 10 terms above, write a paragraph that CLEARLY distinguishes between financial accounting and managerial accounting. Hint: Your paragraph should not be a mere repeat of the items above, but also include a DISCUSSION in such a way that the reader will know the difference between financial and managerial account.g

Answer 1

Answer (A):

SN	Nature
1	F
2	M
3	F
4	M
5	F
6	M
7	F
8	F
9	M
10	F

Part (B)

Financial accounting records and analyzes the financial matters of the entities whereas management accounting helps making decisions related to the management of the entity. Financial accounting deals with past or historical data, but management accounting deals with past, present and futuristic data. Financial accounting is all quantitative whereas management accounting is concerned with qualitative as well as quantitative aspects. Financial accounting is compulsory for all entities and is used by all stakeholders (i.e. government, investors, etc.), but management accounting has no statutory requirements for all entities and is used primarily for internal purposes by the management. Further, financial statements need to be prepared as per relevant GAAP or IFRS but this is not the case with management accounting. Financial accounting is not dependent on management accounting but management accounting is highly dependent on financial accounting.

In case of any doubt, please comment.