Financial Accounting vs Management Accounting

Financial Accounting:- Financial accounting is concerned mainly with the historical aspects of external reporting, that is, providing financial information to outside parties such as investors, creditors, and governments. To protect those outside parties from being misled, financial accounting s governed by what are called generally accepted accounting principles(GAAP).

Management Accounting:- Management accounting, on the other hand, is concerned primarily with providing information to internal managers who are charged with planning and controlling the operations of the firm and making a variety of management decisions. Because of its internal use, management accounting is not subject to GAAP. More specially, the difference betweenfinancial and management accounting are summarized below.

Financial Accounting	Management Accounting
Provides data for external users	Provides data for Internal Users
Is required by the law	Is not mandatory by law
Is subject to GAAP(Generally accepted accounting principles)	Is not subject to GAAP(Generally accepted accounting principles)
Must generate accurate and timely data	Emphasizes relevance and flexibility of data
Emphasizes the past	Has more emphasis on the future
Looks at the business as a whole	Focuses on parts as well as on the whole of a business
Primarily stands by itself	Draws heavily from other disciplines such as finance, economics, and operations research
Is an end in itself	Is a means to an end

Socialize It and Share the post with your friends

SOCIALIZE IT →

Tweet

---

FOLLOW US →

SHARE IT →