Differences between Financial Accounts and Management Accounts

Business Finance

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Financial Accounts vs Management accounts:.......................................................................3
Usefulness of financial accounts and management accounts to users of financial information:
................................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business finance corresponds to financial monetary aid when a company runs shortage of
funds. The funds help organizations to manage day-to-day functions, enhance market reach,
acquire materials, spend on infrastructures, and many other requirements. The study
evaluates the main differences among financial accounts and management accounts, including
their relevance to multiple users of fiscal information based on book: Business Accounting and
Finance by Catherine Gowthorpe (Gowthorpe, 2005).
MAIN BODY
Financial Accounts vs Management accounts:
Financial accounts are set of accounts which record financial transactions of an enterprise's
everyday operation. Selling products or providing services to a buyer or service receiver and
paying the debt later are instances of financial events/transactions recorded in financial accounts.
Financial managers/executives use financial accounts or statements to arrange and invest cash
funds and make sound financial decisions. These accounts are mainly prepared by managers to
frame annual financial statements (Gowthorpe, 2005).
Management accounts: These are key aspects of managerial accounting which focuses on
recording of all key transactions and report key aspects of organisation which are useful for
managerial decision making. These accounts are specifically used by managers for internal
organisational purposes. This cover qualitive aspects of organisation as it not only records and
reports monetary data or information but also reports non-financial and monetary information.
Reports under Management accounting may be abundant as needed: for instance, small
enterprise which employs several employees as well as involved in providing services, which
require information for the process of decision-making and controlling purpose. MA systems in
this scenario require to be informal and rudimentary.
For better understanding the concepts of financial accounts and managerial/management
accounts, here below differences between both of them will assist:
Difference basis Financial Accounts Management Accounts
Audit Financial accounts
are mainly reported to
Management accounts are
generally used within enterprise and