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Contrast between Financial Accounting and Managerial Accounting

Financial accounting refers to processing or records, summarizing and reporting transactions resulting from business activities and operations that occur over a duration of time. The transactions are summarized for the purposes of preparing for financial statements such as the balance sheet and cash flow (Mathur, 2011). Financial accounting is designed to accurately reflect on business activities; help organizations or companies abide and meet the requirements of stipulated by the law. They also reveal financial accounts to entrepreneurs, allow for the upgrading evaluation, and enable efficient resource allocation

            On the other hand, Management accounting refers to a procedure of preparing an organization report and interpretations that offers precise and on time fiscal and numerical data required by a manager to carry out daily immediate decision-making (Mathur, 2011)..

Financial accounting outputs yearly reports  for exterior stakeholders  whereas managerial accounting  comes up with report every month  or very  week meant  for a company’s internal audience,  for example departmental managers  and  chief executive officers (Mathur, 2011).

In terms of past and present usage, Data generated from financial accounting is historical and is collected over a period (Mathur, 2011). On the other hand, managerial accounting focuses on past performances and comes up with information that can be used for 1future business forecasts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

Mathur, S. B. (2011). Accounting for management. New Delhi: Tata McGraw-Hill Education.

Weiss, J. W. (2014). Business Ethics: A Stakeholder and Issues Management Approach. San Francisco, US: Berrett-Koehler Publishers.