MANAGERIAL & FINANCIAL ACCOUNTING

MANAGERIAL ACCOUNTING

            Management accounting is considered the process of identifying, measuring, analyzing, and communicating information for the pursuit of objective of the organization (Investopedia US, 2012), this process prepares management reports and accounts to provide financial and statistical information required by managers for decision making in the short term (WebFinance, Inc, 2012) includes the amount of  available cash, produced sales revenue, number of orders in hand, the state of payables and receivables, outstanding debts, raw materials and inventory, and may additionally include trend graphs, analysis variance, and other statistics.

FINANCIAL ACCOUNTING

            According to business dictionary, the financial accounting is a field of accounting that treats money as a means to measure economic performance and not as a factor of production comprising all the surveillance and control of money into and out of an organization, is responsible for prepare financial reports such as balance sheet and income statement of the organization's management, investors, lenders, suppliers, tax authorities and other stakeholders. (WebFinance, Inc, 2012), and produces annual reports mainly for external stakeholders (WebFinance, Inc, 2012).

            Financial accounting reflects the economic activity of the firm; allow users to understand its situation in global and synthetic way (Stolowy & Lebas, 2006).

SIMILITUDES AND DIFFERENCES

Financial and managerial accountings use the same basic information as explain by Stolowy and Lebas (2006) for different purposes, financial accounting tends to be a recording of historical events and managerial accounting use the same information to forecast future situation. (Stolowy & Lebas, 2006)

The key difference between managerial and financial accounting is that accounting information management is intended help the organization charge of making decisions. By contrast, financial accounting is aimed at providing details third person aliens the organization. (Investopedia US, 2012).

References

Investopedia US. (2012). Investopedia. Retrieved from Managerial accountng: http://www.investopedia.com/terms/m/managerialaccounting.asp

Stolowy, H., & Lebas, M. J. (2006). Financial accounting and reporting. London: South-Wester Cengage learnig.

WebFinance, Inc. (2012). BusinessDictionary.com. Retrieved from management accounting: http://www.businessdictionary.com/definition/management-accounting.html