Accounting Case Studies 1 How is managerial accounting diffe

Accounting Case Studies

1. How is managerial accounting different from financial accounting?

Solution

Solution:

The following aspect make managerial accounting differs from financial accounting:

1. The purpsoe of financial accounting is to report financial performance and financial position of a company; however managerial accouting is used for decision making.

2. Financial accounting is mandatory as per various laws and regulations; however managerial accouting is not mandatory.

3. Financial accouting reports are prepared for external parties; however managerial accounting reports are used by internal management for decision making.

4. Financial accounting reports are prepared periodicall like monthly, quarterly or annually; however managerial accouting reports are need based and ongoing.

5. Financial report are reviewed by external auditors, however there is no external review of mangerial accounting reports.

6. Financial accouting focus on past transaction; however managerial accouting focus on information to aid decision for the future.