Role of Financial Accounting Versus Managerial Accounting Matrix
Compare and contrast financial accounting and managerial accounting by answering the following questions in the matrix provided. Cite any sources you use in accordance with APA guidelines.
Term or Concept
What is the primary purpose of the accounting system?
The primary purpose is to produce forms portraying a company’s performance over a period of time to make sound judgement on economic decisions. Managerial accounting is the collection, analyzing, and reporting of information concerning operations (Bragg, 2012). What are the types of reports produced?
Financial accounting creates reports that reflect the business’ financial health for external users.These include balance sheets, income statements, and statement of cash flow. These reports are aimed for internal use and provide data on past, as well as future, numbers in operations. Budget reports, Job cost reports, sales and revenue forecasts are examples. Who are the primary users?
External users, such as shareholders, creditors, tax authority all utilize reports generated from financial accounting. Managerial accounting is aimed at providing data for Internal users, such as management of that company, senior supervisors, and other employees. What portion of the company is the primary focus?
Financial accounting focuses on financial aspects of the company’s history. External users rely on this information to make decisions concerning the firm. Managerial accounting focuses primarily on the relevance to business decisions and the administrative management portion. The statements are necessary to make sound decisions in operations. These reports focus on future data. What time periods are included?
The time periods for statements generated in financial accounting generally cover 12 months. There are no specific time periods for managerial...
...ManagerialAccounting Vs FinancialAccounting Resources
carbon.cudenver.edu/~gcolbert/6550.ch12.pdf MANAGERIALACCOUNTING AND COST-VOLUME-PROFIT ManagerialAccounting Contrasted to FinancialAccounting. Managerialaccounting supports ManagerialAccounting vs. FinancialAccounting
cob.ohio-state.edu/~bentz_1/525/problems/Finvsmgrl.doc Bentz Financial vs. ManagerialAccounting in which financialaccounting and managerialaccounting are alike in which managerialaccounting seems to differ from financialaccounting
cob.ohio-state.edu/~bentz_1/Emba802/PowerPoint/session1.ppt Any observations? 15. Managerial vs. FinancialAccounting factories, and divisions. 16. Managerial vs. FinancialAccounting of the firm. 17. Managerial vs. FinancialAccounting
Free Essay Financial vs. ManagerialAccounting Free essays, free term papers, and free book reports available at eCheat.com. All free essays submitted and graded by high school and...
Management accounting or managerialaccounting is the process of identifying, analyzing, recording and presenting financial information that is used for internally by the management for planning, decision making and control.In contrast to HYPERLINK "http://accountingexplained.com/financial/" financialaccounting, managerialaccounting is concerned with providing helpful information and reports to internal users such as managers and entrepreneurs etc. so that they can control and plan the business activities. Few of the main areas, in which managerialaccounting is used are:Planning and Budgeting: Managers use managerialaccounting techniques to plan what to sell, how much to sell, what price is to be charged to reimburse the costs of production and also earn an optimal profit. Also they have to plan how to finance the operations and how to manage cash etc. This is very important to keep the business operations working smoothly. The HYPERLINK "http://accountingexplained.com/managerial/capital-budgeting/" capital budgeting and HYPERLINK "http://accountingexplained.com/managerial/master-budget/" master budget are the two important topics in this area.Decision Making: When managers have to decide whether or not to...
...University of Phoenix Material
Role of FinancialAccountingversusManagerialAccounting Matrix
Compare and contrast financialaccounting and managerialaccounting by answering the following questions in the matrix provided. Cite any sources you use in accordance with APA guidelines.
Term or Concept
What is the primary purpose of the accounting system?
The main purpose of financialaccounting is to prepare financial reports that provide information about a firm’s performance to external parties such as investors, creditors, and tax authorities. Must be performed according to GAAP (Generally Accepted Accounting Principles) guidelines.
Managerialaccounting differs from financialaccounting in that managerialaccounting is for internal decision making and does not have to follow any rules issues by standard-setting bodies. This data provided can be used to control or improve the operation of the business.
What are the types of reports produced?
Holistic and historical accounts of the company’s financial health:
Balance Sheet (company’s resources and financial...
...Managerial and FinancialAccounting Report
FIN540 Accounting for Managerial Decision Making
Financialaccounting develops account information that is used by external parties such as stockholders, suppliers, banks, and government regulatory agencies in their decision-making. Management accounting develops confidential accounting information that is used by managers within an organization. Management accounting is a complex process of identifying, accumulating and analyzing information and then communicating this information to managers to aid in fulfilling organizational objectives. Interpretation of those analyses is also a large component of this discipline. This paper shall serve to illustrate the key differences and how professional organizations, such as the Institute of Management Accountants (IMA) influence organizations and standards.
Financial and ManagerialAccounting: A Comparison
Financialaccounting primary produces financial statements, such as profit and loss statements, statements of cash flow and balance sheets; these types of statements are primarily used for analysis by investors and government agencies but also internal managers. An important constraint to remember is that financial statements...
“Financialaccounting is compulsory for companies. Therefore it must be the only type of accounting that managers need.”
You are required to:
Discuss the above statement and provide examples to support your points of view.
Financialaccounting is the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, owners and other stakeholders. The fundamental need for financialaccounting is to reduce principal-agent problem by measuring and monitoring agents' performance and reporting the outcome to interested end-users.
Financial accountancy is used to prepare accountancy data for people outside the organisation or for those, who are not involved in the mundane administration of the company. Meanwhile, it generates some key documents, which includes profit and loss account, patterning the method of business traded for a specific period and the balance sheet that provides a statement, showing mode of trade in business for a specific period. It records financial transactions showing both the inflows and outflows of money from sales, wages etc. Financialaccounting empowers the managers and aids them in managing more efficiently by preparing standard financial information,...
...Stratton: Chief Financial Officer, CFO, responsible for financial checks and balances
And verifies financial statements produced by accounting department
Simone Jobs: Chief Operating Officer, COO
Cyrus Bailey: Chief Marketing Officer, CMO
Board of Directors: Steve Wells, Tim McCarthy, David Holmes, Sonia Dietz, Joan DeCath, Kim Horner, John Stewart
Angel Fund Investors: Golden Seeds, Who it Helps
1) Equipment and Licenses: This category covers equipment, building lease payments, annual depreciation for equipment purchased.
2) Recurring Expenses – Contracted: This category includes telecom contracts (voice, mobile, data), managed services managed print, etc.
3) Recurring Expenses – No Contract: This category includes Anti-virus renewals, warranties, maintenance agreements etc.
4) Staffing Expenses: All HR expenses for part time and full time employees belong to this category.
5) Contract Labor and 3rd Parties: outsourced vendors and 3rd party service providers come under this category.
2. IFRS / GAAP convergence
USBT uses International Financial Reporting Standards (IFRS) for its bookkeeping. Financial statements produced using IFRS were used to obtain startup fund. Current quarterly statements are produced using this format to maintain consistency and clarity for investors’ sake. USBT lists balance sheet items, revenue,...
...• Accounting is the system that measures business activities and process information into reports.
• Accountant maintain, audit and prepare financial records for a person or a company.
• Main careers in accounting - bookkeeper, auditor, financial advisor, taxation, carbon accountant and accountant etc…
• Bookkeeping is recording financial recorders and summaries of financial transaction.Accounting is measuring business activities and process information into reports.
• Main professional accounting association in Australia are:
CPA – certified practising accountant
ICAA (the institute of chartered accountant in Australia)
CA – chartered accountant
NIA (National institute of Accountants)
PNA - professional national accountant
Taxation institute of Australia
FPA - financial planning association of Australia
• The users of accounting information fall into 2 different users:
External Users are the financial accountants from outside the business
Internal Users are the managerial accountants from inside the business
Financial accountants are external users – individuals from outside the business.
External users include regulatory authorities, suppliers, customers, bankers, competitors etc…
...Financialaccounting reports are prepared for the use of external parties such as shareholders and creditors, whereas managerialaccounting reports are prepared for managers inside the organization.
This contrast in basic orientation results in a number of major differences between financial and managerialaccounting, even though both financial and managerialaccounting often rely on the same underlying financial data. In addition to the to the differences in who the reports are prepared for, financial and managerialaccounting also differ in their emphasis between the past and the future, in the type of data provided to users, and in several other ways. These differences are discussed in the following paragraphs.
Emphasis on the Future:
Since planning is such an important part of the manager's job, managerialaccounting has a strong future orientation. In contrast, financialaccounting primarily provides summaries of past financial transactions. These summaries may be useful in planning, but only to a point. The future is not simply a reflection of what has happened in the past. Changes are constantly taking place in economic conditions, and so on. All of these changes demand that the manager's planning...