1.Managerial accounting vs financial accounting
Managerial accounting information system is an information system that produces outputs using inputs and processes needed to satisfy specific managerial objectives.
How do management accounting and financial accounting differ? Management Accounting Financial Accounting 1. Internally focused 1.Externally focused 2. No mandatory rules 2.Must follow externally imposed rules 3. Financial and nonfinancial information, 3.Objective financial information subjective information possible. 4. Emphasis on the future 4.Historical orientation 5.Internal evaluation and decision based on very detailed 5. Information about the firm as a whole. Information.
6.Broad multidisciplinary 6.More self-contained
Financial accounting is for external users and follow restrictive rules and regulations. Managerial accounting is for internal users (managers ) who plan, control, and make decision.
2.Why do you need Managerial Accounting?
The three objectives of a management accounting information system are:
...University of Phoenix Material
Role of FinancialAccounting Versus ManagerialAccounting 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 primary purpose is to produce forms portraying a company’s performance over a period of time to make sound judgement on economic decisions.
Managerialaccounting is the collection, analyzing, and reporting of information concerning operations (Bragg, 2012).
What are the types of reports produced?
Financialaccounting 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...
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...
...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...
Management Accounting is used primarily by those WITHIN a company or organization. Reports can be generated for any period of time such as daily, weekly or monthly. Reports are considered to be "future looking" and have forecasting value to those within the company.
Financialaccounting is used primarily by those OUTSIDE of a company or organization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial decisions or investments in a company.
1. Confidentiality and Type of Information. Management Accounting is the branch of Accounting that deals primarily with confidential financial reports for the exclusive use of top management within an organization. These reports are prepared utilizing scientific and statistical methods to arrive at certain monetary values which are then used for decision making. Such reports may include:
1. Sales Forecasting reports;
2. Budget analysis and comparative analysis;
3. Feasibility studies;
4. Merger and consolidation reports
FinancialAccounting, on the other hand, concentrates on the production of...
...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,...
...Introduction to AccountingAccounting is a profession used to make financial and business decisions. Billions of dollars exchange hands every day, in millions of separate business transactions. These are recorded and reported on using a comprehensive set of guidelines, referred to as Generally Accepted Accounting Principles (GAAP).
Brief History of AccountingAccounting was born before writing or numbers existed, some 10,000 years ago, in the area known as Mesopotamia, later Persia, and today the countries of Iran and Iraq. This area contains the Tigris Euphrates river valley, a large fertile area 10,000 years ago with a large thriving population and active trading between towns and cities up and down the two rivers.
Writing and numbers would be not be invented for about another 5,000 years. And what happens next will directly lead to the invention of both writing and number systems.
At that time, merchants faced many of the same problems businesses face today. They had to ship their merchandise up and down the rivers, and that meant trusting a boatman with their goods. Unfortunately, not all boatmen were honest, and disagreements often arose about how much was shipped versus what was received at the other end.
It is hard for us today to imagine a world without writing and numbers. Try to imagine yourself in their position.... what would you do?
To deal with the problem, merchants came up...
Fundamentals of Accounting: Managerial verses FinancialAccounting
Fundamentals of Accounting
Fundamentals of Accounting: Managerial verses FinancialAccounting
What has the organization in its focus; futuristic planning, financial control, and data based decision making affecting its reports and suggestions; and an emphasis on relevance and timeliness in its decision making (2012)? The answer to this question is managerialaccounting. According to J. W. Jones (2013), a retired managerial accountant, her job and other positions with the title are responsible for reporting financial information to the company’s administration and parties outside of her organization such as stockholders or creditors; however, his focus was the internal accounting services and needs of the business’s management. Jones confirms there is a difference between managerial and financialaccounting. His career choice was managerialaccounting which specialized in helping gather and communicate the information needed to set the company’s long term objectives and goals for cost control, revenue strengths and weaknesses, and profit data statistics within in local departments, regional...
“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,...