...Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002) Managerial Accounting addresses those aspects that relates to an individual organization return on investments (ROI). (Albrecht, Stice, Stice, & Skousen, 2002) A company’s profitability depends on periodic attention to its assets turnover and profit margin. This process is designed to support the de... ... middle of paper ... ...egulator or auditor is going to insist that a company implement a good management accounting system. (Garrison, Noreen, & Brewer, 2010) The choice of how to collect and utilize information in a company is strictly management’s decision and is a part of the company’s competitive strategy. Financial and Managerial accounting are used for making sound financial...
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...Managerial accounting is concerned with providing information to managers-that is, people inside an organization who direct and control its operation. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside an organization. Managerial accounting provides the essential data with which the organizations are actually run. Managerial accounting is also termed as management accounting or cost accounting. Financial accounting provides the scorecard by which a company's overall past performance is judged by outsiders. Managerial accountants prepare a variety of reports. Some reports focus on how well managers or business units have performed-comparing actual results to plans and to benchmarks. Some reports provide timely, frequent updates on key indicators such as orders received, order backlog, capacity utilization, and sales. Other analytical reports are prepared as needed to investigate specific problems such as a decline in the profitability of a product line. And yet other reports analyze a developing business situation or opportunity. In contrast, financial accounting is oriented toward producing a limited set of specific prescribed annual and quarterly financial statements in accordance with Generally Accepted Accounting Principles (GAAP). (Ray H. Garrison Eric W Noreen 1999). Managerial accounting is managers oriented therefore its study must be preceded by some understanding of what managers do, the...
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...Q1. (a) “Managerial accounting is a field of accounting that provides economic information for all interested parties.” Do you agree? Explain. No, I don’t. Managerial accounting provides economic and financial information for managers and other internal users but not for all interested parties. (b) Joe Delong believes that managerial accounting serves only manufacturing firms. Is Joe correct? No, he isn’t. Managerial accounting can be serves to all kind of business for making a decision, so it has not necessary to serve only manufacturing firms. Q2. Distinguish between managerial and financial accounting as to (a) primary users of reports, (b) types and frequency of reports, and (c) purpose of reports. The primary users of managerial accounting are managers and officers. The reports usually come out as frequent as needed. Their purposes are for making specific goals. On the other hand, the users of financial accounting are stockholders, creditors, and regulators. The reports usually come out quarterly and annually. Their purposes are usually generally. Q3. How do the content of reports and the verification of reports differ between managerial and financial accounting. The content of reports of the managerial accounting pertains to subunits of the business, and they are very detailed. The content extends beyond double-entry accounting to any relevant data, and the standard is relevance to decisions. The content usually has no independent audits. On the other hand,...
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...Difference Between Managerial Accounting and Financial Accounting ACC 560 Term Paper In this term paper the author will discuss Managerial Accounting and the components of Managerial Accounting. The author will also compare the different components of financial accounting compared to managerial accounting. According to McGraw Hill, Managerial Accounting is concerned with providing information to managers, people inside an organization who direct and control its operations.” (Garrison & Noreen) Financial Accounting according to McGraw Hill “is concerned with providing information to stockholders, creditors and others who are outside an organization.” (Garrison & Noreen) In managerial accounting a wide variety of reports are prepared. Reports in managerial accounting focus on how well managers and businesses have performed. Most of these reports provide timely, frequent updates on information regarding when orders are received, sales, order backlog, and utilization. Also, according to McGraw Hill, “financial accounting is oriented toward providing a limited set of specific annual and quarterly financial statements in accordance to the Generally Accepted Accounting Principles (GAAP).” (Garrison & Noreen) Managerial Accounting does not have too followed the Generally Accepted Accounting Principles (GAAP). For this reason, managers set aside their own rules concerning the content and form of internal reports. The only constraints...
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...Goal of Managerial Accounting http://edugen.wileyplus.com/edugen/courses/crs4637/rc/jiambalvo3341c... GOAL OF MANAGERIAL ACCOUNTING LEARNING OBJECTIVE 1 State the primary goal of managerial accounting. Virtually all managers need to plan and control their operations and make a variety of decisions. The goal of managerial accounting is to provide the information they need for planning, control, and decision making. If your goal is to be an effective manager, a thorough understanding of managerial accounting is essential. Planning LEARNING OBJECTIVE 2 Describe how budgets are used in planning. Planning is a key activity for all companies. A plan communicates a company's goals to employees aiding coordination of various functions, such as sales and production.A plan also specifies the resources needed to achieve company goals. Budgets for Planning The financial plans prepared by managerial accountants are referred to as budgets. A wide variety of budgets may be prepared. For example, a profit budget indicates planned income, a cash-flow budget indicates planned cash inflows and outflows, and a production budget indicates the planned quantity of production and the expected costs. Consider the production budget for Surge Performance Beverage Company. In the coming year, the company plans to produce 5,000,000 12-ounce bottles. This amount is based on forecasted sales. To produce this volume, the company estimates it will spend $1,500,000 on bottles, $400,000...
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...Thompson, Managerial Accountant Assistant From: Danielle Wright Breckenridge, Date: January 8, 2015 Subject: Similarities and differences between financial and managerial accounting Hello Susan, I wanted to start by saying welcome aboard. We are glad to have you as a part of the team hear at EEC and I am sure with your experience and accounting background you are going to be a perfect fit. I do understand that you have spend most of your career working in a financial accounting office preparing journal entries, and you have a great understanding of financial accounting however you have no experience with managerial accounting. I am providing this memo in hopes of giving you with an explanation of the similarities and differences between financial and managerial account, give an example of managerial accounting reports, show how management might use information to make decisions and show an example of the horizontal analyzes, vertical analyzes and ratio reports. People may think that financial and managerial accounting is the same thing. On the surface, the actual number crunching of financial data contains a lot of similarities and both accounting types use much of the same data. While it is true there are some similarities, there are also some distinct differences. By taking a closer look at both types of record keeping, these differences become a bit more apparent as they each serve their own function and purpose. |Managerial Accounting ...
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...ACC 560 WK 2 Quiz 1 - All Possible Questions To Purchase Click Link Below: http://strtutorials.com/ACC-560-WK-2-Quiz-1-All-Possible-Questions-017.htm ACC 560 WK 2 Quiz 1 - All Possible Questions TRUE-FALSE STATEMENTS 1. Reports prepared in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports. 2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated. 3. Managerial accounting applies to all forms of business organizations. 4. Determining the unit cost of manufacturing a product is an output of financial accounting. 5. Managerial accounting internal reports are prepared more frequently than are classified financial statements. 6. The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity. 7. The Sarbanes-Oxley Act replaces generally accepted accounting principles in a manufacturing company. 8. Controlling is the process of determining whether planned goals are being met. 9. Decision-making is an integral part of the planning, directing, and controlling functions. 10. Direct materials costs and indirect materials costs are manufacturing overhead. 11. Manufacturing costs that cannot be classified as direct materials or direct labor are classified...
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...difference between managerial accountant and a financial accountant are vastly different. Investopedia defines managerial accounting as the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals. The information that a managerial account has is primarily targeted to assist managers inside the organization to make better decisions for the company ("Financial accounting," ). On the other hand the financial accounting is greatly different in that it is a method of recording, summarizing and reporting the numerous amounts of dealings from an industry; as a result it makes available a precise representation of the business fiscal situation and performance. The most important objective of financial accounting is the planning of financial statements - including the balance sheet, income statement and cash flow statement that condenses the firm's functioning presentation over a specific period, and financial position at a precise point in time. These statements - which are normally prepared quarterly and annually, and in accordance with Generally Accepted Accounting Principles (GAAP) - are aimed at external parties including investors, creditors, regulators and tax authorities ("Financial accounting," ). 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...
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...ACC 560 WK 2 Quiz 1 - All Possible Questions To Purchase Click Link Below: http://strtutorials.com/ACC-560-WK-2-Quiz-1-All-Possible-Questions-017.htm ACC 560 WK 2 Quiz 1 - All Possible Questions TRUE-FALSE STATEMENTS 1. Reports prepared in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports. 2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated. 3. Managerial accounting applies to all forms of business organizations. 4. Determining the unit cost of manufacturing a product is an output of financial accounting. 5. Managerial accounting internal reports are prepared more frequently than are classified financial statements. 6. The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity. 7. The Sarbanes-Oxley Act replaces generally accepted accounting principles in a manufacturing company. 8. Controlling is the process of determining whether planned goals are being met. 9. Decision-making is an integral part of the planning, directing, and controlling functions. 10. Direct materials costs and indirect materials costs are manufacturing overhead. 11. Manufacturing costs that cannot be classified as direct materials or direct labor are classified...
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...Definition of managerial accounting -- The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions. Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer. These reports typically show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics. Also called managerial accounting. Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist manage- ment in the formulation and implemen- tation of an organization’s strategy. Management accounting’s essential compo- nent is the formulation and implementation of strategy to help an organization succeed. Role of managerial accounting and the management accountant in a business or organization --- Managerial accountants record financial information for their companies that is used by the organization’s management team to aid in the decision-making process...
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...Fundamentals of Accounting: Managerial verses Financial Accounting Fundamentals of Accounting acct122 Fundamentals of Accounting: Managerial verses Financial Accounting What has the organization in its focus; futuristic planning, financial control, and data based decision making affecting its reports and suggestions; and an emphasis on relevance and timeliness in its decision making (2012)? The answer to this question is managerial accounting. According to J. W. Jones (2013), a retired managerial accountant, her job and other positions with the title are responsible for reporting financial information to the company’s administration and parties outside of her organization such as stockholders or creditors; however, her focus was the internal accounting services and needs of the business’s management. Mrs. Jones confirms there is a difference between managerial and financial accounting. Her career choice was managerial accounting which specialized in helping gather and communicate the information needed to set the company’s long term objectives and goals for cost control, revenue strengths and weaknesses, and profit data statistics within in local departments, regional and often territorial plants. At times, Mrs. Jones found herself working with certain data regarding customer groups and how they would be affecting that business segment in the future. This differed from financial accounting in that the latter would handle the matter from a historical account...
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...Unit 1 – Introduction to Managerial Accounting Genean Benders American InterContinental University Memo An internal managerial accounting system consists of information that management uses to make decisions about the operations of the business. As per the request of the CEO, I am writing a memo to provide information of the characteristics of managerial accounting and why it is necessary for another managing accountant within our company. The Seven Characteristics of Managerial Accounting There are seven characteristics of an managerial accounting system which is comprised of users and decision makers, purpose of information, flexibility of practice, timeliness of information, time dimension, the focus of information and the nature of information (Wild & Shaw, 2012). There is often confusion between financial and managerial accounting, therefore, the following will give detail of the explanation of the seven characteristics of managerial accounting versus financial accounting. This information should also aid with the understanding of why another managing accountant is needed. Users and decision makers. In managerial accounting, this characteristic refers to the internal management, unlike financial accounting that involves external users such as investors and creditors (Wild & Shaw, 2012). Purpose of Information. Management uses informational reports of the company’s financial activities to make important decisions about the ongoing operations of the...
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...Chapter 1 Introduction to Managerial Accounting Regardless of your major or intended career path, most of you will become managers one day. A manager has responsibility and control of selected parts of a company’s operations, or in some cases, multiple aspects of operations. Only those of you that happen to stay at the ‘bottom’ of a company, prefer never to get promoted, or never accept any responsibility for some aspect of a business, will miss the ‘management’ opportunity. Fortunately, none of you will likely fall into this persona given that you have taken the initiative to attend college. Understanding managerial accounting will help you move up the ladder more quickly, regardless of your chosen career path. How Can Managerial Accounting Help You? In any responsible business capacity, your boss and all other management levels above you will want to know how well you handle your responsibilities. To do so requires that they measure your performance. The evaluation process is similar to your perceptions in each college course in which you enroll. During your first class meeting in each course, one of your initial goals is to find out how your performance will be evaluated. In a business environment, you want to know what they expect, i.e., how they will measure your performance. While you won’t be earning letter grades in the business world, your performance will ultimately translate into promotions, bonuses, raises, reprimands, or perhaps dreaded walking...
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...Managerial accounting is a branch of accounting that observes and calculates the “actual costs” of a company or organizations operation. Managerial accounting is very important in helping managers within the company/organization make decisions that are best for the company in day-to-day and short term operations. Managerial accounting information that is used for making decisions are; information on the cost of a company/organizations products and services, budgets, performance reports, and any other information which might assist managers in their planning and control activities. Managerial and financial accounting is different in a few aspects, from the types of statements they prepare to the reasons that each statement is prepared and how they are important to users of the statements. Managerial accounting is more for the need and use within the company/organization, where financial accounting is used more for outside of the company/organization. Managerial accounting is concentrated more on providing information to personnel that works within the company to help direct and control the operation within that company. It can help determine things such as what to charge for products made by the company/organization based on what the costs to produce the product are. Managerial accounting is also able to show total costs involved in the total production of products or services because of the types of statements that are prepared and how exact costs are broken down. Financial...
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...Introduction to Managerial Accounting Regardless of your major or intended career path, most of you will become managers one day. A manager has responsibility and control of selected parts of a company’s operations, or in some cases, multiple aspects of operations. Only those of you that happen to stay at the ‘bottom’ of a company, prefer never to get promoted, or never accept any responsibility for some aspect of a business, will miss the ‘management’ opportunity. Fortunately, none of you will likely fall into this persona given that you have taken the initiative to attend college. Understanding managerial accounting will help you move up the ladder more quickly, regardless of your chosen career path. How Can Managerial Accounting Help You? In any responsible business capacity, your boss and all other management levels above you will want to know how well you handle your responsibilities. To do so requires that they measure your performance. The evaluation process is similar to your perceptions in each college course in which you enroll. During your first class meeting in each course, one of your initial goals is to find out how your performance will be evaluated. In a business environment, you want to know what they expect, i.e., how they will measure your performance. While you won’t be earning letter grades in the business world, your performance will ultimately translate into promotions, bonuses, raises, reprimands, or perhaps dreaded walking...
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