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Differences between financial and accounting management

Differences Between Financial and Accounting Management

Financial accounting and managerial accounting (sometimes known as management accounting) are two separate types of accounting. Despite the fact that both types of accounting deal with numbers, managerial accounting is only used internally. Financial accounting, on the other hand, is concerned with gathering accounting data in order to prepare financial statements.

Difference between Financial and Manegerial Accounting

1

Report Focusing

  • Financial Accounting – Creating financial statements that may be shared with both external and internal parties.
  • Managerial Accounting – Internal operational reporting will be shared.

2

Frequency

  • Financial Accounting – End-of-accounting-period payments are due.
  • Managerial Accounting – Management issues them more regularly and when needed.

3

Standards

  • Financial Accounting – Various accounting standards must be followed.
  • Managerial Accounting – There are no standards.

4

Period

  • Financial Accounting – Examines financial data to look back in time.
  • Managerial Accounting – Forecasting is used to see into the future.
The intended users of information differ significantly between financial accounting and managerial accounting. Financial accounting gives financial data to external parties outside of the corporation, whereas managerial accounting provides critical information to help managers make informed business decisions within the organization.

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