1. Grooming Financial Managers…
Finance and Money
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Cash and Accrual system of accounting »
Differences Between Financial accounting, management
accounting and cost accounting
FINANCIAL ACCOUNTING MANAGEMENT
ACCOUNTING
PRIMARY USERS External( Investors, government Internal(Managers of business,
authorities, creditors) employees)
PURPOSE OF Help investors, creditors, and Help managers plan and control
INFORMATION others make investment, credit, business operations
and other decisions
TIMELINES Delayed or historical Current and future oriented
RESTRICTIONS GAAP FASB AND SEC GAAP does not apply, but
information should be restricted
to strategic and operational
needs
NATURE OF INFORMATION Objective, auditable, reliable, More subjective and
consistent and precise judgmental, valid, relevant and
accurate
SCOPE Highly aggregated information Disaggregated information to
about the overall organisation support local decisions
BEHAVIOURAL Concern about adequacy of Concern about how reports will
IMPLICATIONS disclosure affect employees behaviour
FEATURES Must be accurate and Usually approximate but
timelyCompulsory under relevant and flexibleExcept for
company law Is an end in itself few companies, it is not
mandatory Is a mean to the end
SEGMENTS OF It is primarily concerned with Segment reporting is the
ORGANISATION reporting for the company as a primary emphasis.
whole.
FINANCIAL ACCOUNTING COST ACCOUNTING
OBJECTIVE It provides information about It provides information of
financial performance ascertainments of costs to
andfinancial position of control costs and for decision
the business. making about the costs.
NATURE It classifies records, presents It classifies, records, presents

2. and interprets transactions in and interprets in a significant
terms of money. manner materials, labour and
overhead costs.
RECORDING OF DATA It records historical data. It records and presents
estimated, budgeted data. It
makes use of both historical
costs and predetermined costs.
USERS OF INFORMATION External users like Used by Internal management
shareholders, creditors, at different levels.
financial analysts, government
and its agencies,etc.
ANALYSIS OF COSTS AND It shows profit/loss of the It provides details of costs and
PROFITS organization. profit of each product, process,
job,etc.
TIME PERIOD They are prepared for a definite They are prepared as and when
period, usually a year. required.
PRESENTATION OF A set format is used for There are no set formats for
INFORMATION presenting financial presenting cost informations.
information.