Manegerial and Financial Accounting

Managerial and Financial Accounting

University of Phoenix

PRINCIPLES OF ACCOUNTING

Managerial and Financial Accounting

In the accounting world there are two diverse types of accounting: managerial and financial accounting. These two types of accounting practices the same fundamental principles but their use is quite different from one another. In this paper, Team A will be discussing the difference between managerial and financial accounting. Team A will be evaluating the types of duty managerial and financial accounting provides for the organization. The following will provide a description of the different information managerial and financial accounting will provide and what decision making the organization will take to further their success.

Managerial Accounting concentrates on providing information within the organization so that management can monitor and control the operation more effectively. According to Bushman (2007), “internal users need to review financial information about the company, such as financial statement information. They also use non-financial information about the company, such as customer satisfaction levels and competitor data. Internal users focus on detailed information that reveals the performance of particular subunits of the company, such as divisions or departments.” Managerial accounting also provides advice on figuring the price of products at an industrialized enterprise. The cost from these products will then be used in external financial statements. Unlike financial accounting which provides annual reports mainly for external stakeholders, managerial accounting generates monthly or weekly reports for the internal audiences of the organization. These reports consist of existing cash, sales income, quantity of orders in hand, state of accounts payable and receivable, exceptional debts, raw material and inventory.

Managerial accounting is part of a company's management-information system, which...