Differences between Management and Financial Accounting

BUSINESS FINANCE
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Differences between management and financial accounting.......................................................4
Usefulness of management and financial accounting for financial information users:...............6
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................8
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INTRODUCTION
Business finance is a part of managerial function in which manager use various accounting
tools for take decision. In this report usefulness of financial and management accounting has
been defined clearly and causes which made them differ from each other also describe in
specific manner.
TASK 1
Differences between management and financial accounting
Management accounting: This term defined as vital branch of accounting business entity
used for analysis, recording, classification and interpretation of accounting data in a
systematic way which help in decision making process. In management accounting
professional knowledge of managers is used for systematically recording of transactions.
Financial accounting: It can be defined as accounting process which is used for tracking
transitions related with finance only. Manager use standard guideline for analysing, recording
and presenting theses transaction as financial statement form. Financial accounting help
indentifying performance of business organization within a given time period (Doukakis, 2014).
Financial and management accounting both are essential part of accounting they are interrelated
with each other but have some specific difference which are describe below in tabular format:
Particular Management accounting Financial accounting
objective The main objective of
management accounting is to
provide reliable information to
internal department of
organization.
Financial accounting is used
for providing essential
information to external parties
of organization such as,
shareholders, creditors, finical
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