RESPOND TO DISCUSSION WITH 50 OR MORE WORDS
The Week 6 Discussion consists of one question.
Discuss the differences between financial and managerial accounting. What types of documents are prepared by business organization using financial and managerial accounting?
1.)Good Morning Class,
After reading the required material I’ve concluded that the primary difference in financial and managerial accounting is that managerial accounting is used to provide internal financial and accounting information to the employees and managers so that they can have a clear picture of what the company’s goals are.
Financial accounting reminds me more of what our project that we’ve been working on is like. Jane’s Bikes is a small company and theoretically there aren’t many employees to pass on financial goals to, we are keeping the books to ensure we know what’s going on with the company so this information is more so used for public record, taxes, etc. another example of financial accounting is when corporations that are traded on the stock market file a Form 10-k. This gives the public and outside entities an idea about the health and status of a company.
Sergey
Financial accounting focuses on making accounting information such as income statements, balance sheets, profit and loss statements, and cash flow statements available to creditors, investors, shareholders, and other company stakeholders so that they can make informed investment decisions based on accurate information about the company’s financial position in the market. Managerial accounting, on the other hand, assists managers in making appropriate judgments to achieve organizational goals by planning, organizing, directing, and regulating firm activities. It varies from financial accounting in that it offers information to managers when they need it. It focuses on giving specific information about a single element of company operations rather than presenting an overview of the company’s overall performance.
Financial accounting uses a variety of documents to demonstrate a company’s financial health, including financial statements, balance sheets, income statements, and cash in/out flow statements. For credit terms and investments, these records are used by creditors, investors, and lenders. Internal reports used in managerial accounting include job cost sheets, cost of goods manufactured, and production cost reports. And the primary reason for managers to review these documents is to plan and organize to assist in the company’s successful operations.
https://www.investopedia.com/ask/answers/041015/how-does-financial-accounting-differ-managerial-accounting.asp
-Ferdinand