Managerial and Financial Accounting Paper
Managerial and financial accounting are two very different methods of accounting. Both versions can be very important to the success any organization. This paper will differentiate between managerial and financial accounting while addressing the type of information each provides and how business decisions are made based on the information provided from each type of accounting.
What type of information does managerial accounting provide?
Managerial accounting presents information to support the broad roles, the development of objectives, strategies, operating plans, identification of organizational problems or potential problems and ensures that resources are obtained for use according to plans for achieving the internal objectives for the internal uses. Managerial accounting also provides the internal information on different levels of management that value the adding process of planning, designing, measuring and operating on a non-financial and financial level. The levels of management are based on operational level, middle and upper management and senior executives. The purpose for the information is to be generated at different levels for internal users to see an overview of the reports that are relevant to the budget and how this will effect decisions supported by a budgeting process. Financial accounting differs from managerial accounting for the reason with financial accounting is used for external users such as investors and creditors. Managerial accounting is for the internal users of a company which can include employees as part of the decision making process. When comparing the financial accounting to managerial accounting you will see that managerial is more flexible with the calculations of cost that deals with the current and future; leaving financial accounting to deal with the past transaction and financial statements of the company. Management may want to gather data from different...