A firm requires financial accounting to manage its financial operations and financial status towards the outside stakeholders. It involves summarising and recording various business-related transactions and preparing various reports with the financial data found or gathered. On the other hand, management accounting or managerial accounting is a recent accounting branch that addresses various administrative concerns. It is related to providing financial reports to the company's management to make them take accurate financial decisions for the company's benefit. So, the first difference between financial and management accounting is that financial accounting is responsible for maintaining business transactions. Show In contrast, management accounting provides data to the company's management so that they can make financial decisions to achieve the company’s goal and vision in the future. Did you know? Management accounting helps in providing both Qualitative and Quantitative information to the top-level managers to help them in the decision-making of the firm, whereas financial accounting provides a true and fair view of the firm’s financial statements to external stakeholders. Also read: Accounting Information System Explained With Ais Full Form, Types & Examples Basic functions of Financial AccountingThere are various functions of financial accounting, which are as follows:
When discussing financial accounting vs management accounting, we have to also look at the functions of Management accounting to find out the key difference between financial accounting and management accounting. Let’s check out the functions of management accounting. Basic Functions of Management AccountingThere are various functions of management accounting, which are as follows:
These were the basic functions of financial accounting and management accounting. Now let’s take a look at the difference between financial and management accounting. Also read: Learn Cost and Management Accounting along with its Meaning, Objectives & Types Difference Between Financial Accounting and Management Accounting
These are the differences between financial accounting and management accounting. From the nature of statements prepared, objectives, rules and regulations to the format of financial statements, they differ from each other, which is distinctive from each other. Key Differences and SimilaritiesThere are many differences between financial and management accounting, but specific key differences need to be highlighted, which sets both financial and management accounting apart. These are:
Apart from financial accounting and management accounting differences, there are many similarities between them, which are as follows:
Also read: Learn about Inventory Accounting - Meaning, Objectives, Types & Method ConclusionFinancial accounting and management accounting are two different accounting aspects. To master these concepts, one should be educated with the basic concepts and relevant rules and standards related to accounting. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting. Disclaimer : |