3. WHAT IS FINANCIAL ACCOUNTING?
Keeping track of records and creating a
summary of financial transactions is called
bookkeeping - When this information is
produced and displayed in reports for the use
of the public outside the company, this
process is called financial accounting.
3
shobuj_ctg09@hotmail.com
4. WHAT IS MANAGERIAL ACCOUNTING?
Management accounting or managerial
accounting is the process of identifying,
analyzing, recording and presenting financial
information that is used for internally by the
management for planning, decision making
and control.
4
shobuj_ctg09@hotmail.com
5. Management Accounting is the process of
Identifying
Measuring
Analyzing
Communicating Information
5
shobuj_ctg09@hotmail.com
6. MANAGERIAL VERSUS FINANCIAL ACCOUNTING
Accounting System
(accumulates financial and
managerial accounting
data in the cost accounting
system)
Managerial
Accounting
(Information for
decision making,
planning, and
controlling an
organization’s
operation.)
Financial
Accounting
(Published financial
statements and
other financial
reports.)
6
shobuj_ctg09@hotmail.com
8. AUDIENCE
Financial
Accounting
Managerial accounting
produces information that is
used within an organization,
by managers and
employees.
Financial accounting
produces information that is
used by external parties,
such as shareholders and
lenders.
Managerial
Accounting
8
shobuj_ctg09@hotmail.com
9. OBJECTIVES
Financial
Accounting
The main objectives of financial
accounting are to disclose the
end results of the business, and
the financial condition of the
business on a particular date.
The main objective of managerial
accounting is to help
management by providing
information that is used to plan,
set goals and evaluate these
goals.
Managerial Accounting
9
shobuj_ctg09@hotmail.com
10. Focus
Financial accounting focuses
on history; reports on the
prior quarter or year.
Financial
Accounting
Managerial
Accounting
Managerial accounting
focuses on the present and
forecasts for the future.
10
shobuj_ctg09@hotmail.com
12. Financial
Accounting
Format
Format is informal and is on
a per department/company
basis as needed.
Financial accounts are
reported in a specific format,
so that different
organizations can be easily
compared.
Managerial
Accounting
12
shobuj_ctg09@hotmail.com
16. The key difference between financial and managerial accounting
is that financial accounting is aimed at providing information to
parties outside the organization.
Whereas managerial accounting information is aimed at helping
managers within the organization make decisions.
18
shobuj_ctg09@hotmail.com