management accounting is financial accounting belt at its elastic point explain
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Answer:
There are two primary differences between financial and management accounting. The first difference is that management accounting is presented to a company's internal community, while financial accounting is prepared for an external audience.
Answer:
Explanation of management accounting is financial accounting belt at its elastic point :
Management accounting is the branch of accounting that analyzes and provides cost information to internal management for control,decision-making purposes and planning.
Management accounting is depends on accounting information developed for the managers of an organization. CIMA (Chartered Institute of Management Accountants) defines management accounting as “Management accounting is the process of identifying, measuring, collecting, analyzing, compiling, interpreting and communicating information used by management to plan, evaluate and control an economic entity. to ensure the proper use of responsibility for its resources”. This is the stage of accounting that aims to provide information to managers in planning and controlling operations and making decisions.
Management accounting is concerned with providing information to managers, i.e. the people who direct and control the activities of the organization. In contrast, financial accounting is concerned with communicating information to shareholders, creditors, and others outside the organization. Management accounting provides important data with which organizations are actually managed. Financial accounting provides a scorecard on the basis of which the past results of the company are evaluated.
Because it is manager-oriented, any study of management accounting must be preceded by an understanding of what managers do, what CIOs need, and the general business environment.
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