Question

Diff between management accounting and finanacial accounting

Answer 1

Management accounting provides information to people within an organization while financial accounting is mainly for those outside it, such as shareholdersFinancial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as in the I.A.S International Accounting Standardwithin Europe.Financial accounting covers the entire organization while management accounting may be concerned with particular products or cost centres.

Managerial 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.

Answer 2

1. Financial accounting highlights giving true and a fair view of the financial position of the company to various parties.

Management accounting aims at providing both qualitative and quantitative information to the managers.

2. Financial accounting is compulsory, management accounting is not compulsory.

3. Internal and external parties have access to financial accounting and only internal management has access to management accounting.