managerial accounting Essay

976 WordsDec 10, 20084 Pages
DIFFERENCE BETWEEN MANAGERIAL AND FINANCIAL ACCOUNTING A Preliminary Concepts Definition Coombs, et. al. (2005, p. 4) stated that “management accounting may be described as the determination, presentation, interpretation and application of financial and quantitative information to the internal management of an organization at all levels”. Simply put, management accounting is the accounting system for the planning, control and decision making activities of an organization. However, it must be noted that the data produced by the function that is management accounting is just a singular element of the process of decision making. Management accounting is generally understood as a process or as referring to the use of techniques. The methods utilized to gather, process and come out with financial/quantitative data inside a business to facilitate effectual scorekeeping, control of cost, preparation, pricing, and making decisions to happen. The task of justifying the existence of a management accounting theory lies in the definition of appropriate postulates and principles. Financial accounting, as explained by Elamleh and Willis (2005), deals with categorizing, calculating and documenting the dealings of an organizational venture. During the end of a year or occasionally less than a year, an income statement and a balance sheet are put in order to demonstrate the performance and situation of the venture. Financial accounting principally deals with making available a true and fair analysis of the business venture activities to groups outside of it. To guarantee that the process is completed appropriately extensive concentration will focus on accounting concepts and to all legislative requirements, standards of accounting, and (where fitting) the set of laws of stock exchange. Financial accounting is often divided into a quantity of detailed activities, like carrying out

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