What is accounting?
Accounting is the recording
of financial transactions plus storing, sorting, retrieving, summarizing, and presenting
the information in various reports and analyses.
Accounting is also a
profession consisting of individuals having the formal education to carry out
these tasks.
Accounting also entails
providing a company’s management with the information it needs to keep the
business financially healthy. These analyses and reports are not distributed
outside of the company.
Three areas of internal
analyses and reports are:
[1]. Budgets,
[2]. Standards for controlling operations, and
[3]. Estimating selling prices for quoting new projects.
This accounting is
known as management accounting.
Another accounting involves
compliance with government regulations pertaining to income tax reporting.
Present days the recording, storing and sorting aspects of accounting have been
automated by the advances in computer technology.
What is Managerial Accounting?
The process of identifying, measuring,
analyzing, interpreting, and communicating information for the pursuit of an
organization's goals
What is Financial Accounting?
Reporting of the financial position and
performance of a firm through financial statements issued to external users on
a periodic basis.
What is the difference between financial and managerial 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 at helping managers within the organization make
decisions.
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