Differences between Financial accounting vs Managerial accounting

This is the course of Management Accounting. Presented by Abdul Motaleb Shobuj student of USTC

1. Presentation of Managerial Accounting Difference between Financial Accounting VS Managerial Accounting KEEN ORBIT Group Name- Presented to – Roushan Ara Sultana Assistant Professor FBA, USTC.

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3. What is Financial Accounting? Keeping track of records and creating a summary of financial transactions is called bookkeeping - When this information is produced and displayed in reports for the use of the public outside the company, this process is called financial accounting . 3 [email protected]

4. What is Managerial Accounting? Management accounting or managerial accounting is the process of identifying, analyzing, recording and presenting financial information that is used for internally by the management for planning, decision making and control. 4 [email protected]

5. Management Accounting is the process of Identifying Measuring Analyzing Communicating Information 5 [email protected]

6. Managerial Versus Financial Accounting 6 [email protected]

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8. Audience Financial Accounting Managerial accounting produces information that is used within an organization, by managers and employees. Financial accounting produces information that is used by external parties, such as shareholders and lenders. Managerial Accounting 8 [email protected]

9. Objectives Financial Accounting The main objectives of financial accounting are to disclose the end results of the business, and the financial condition of the business on a particular date. The main objective of managerial accounting is to help management by providing information that is used to plan, set goals and evaluate these goals. Managerial Accounting 9 [email protected]

10. Focus Financial accounting focuses on history; reports on the prior quarter or year. Financial Accounting Managerial Accounting Managerial accounting focuses on the present and forecasts for the future. 10 [email protected]

11. Department Financial Accounting Managerial Accounting Preparing financial accounting is the work of finance department. Managerial accounting is not specific task of particular department. Co-ordination of all department creates management accounting 11 [email protected]

12. Financial Accounting Format Format is informal and is on a per department/company basis as needed. Financial accounts are reported in a specific format, so that different organizations can be easily compared. Managerial Accounting 12 [email protected]

13. Financial Accounting Managerial Accounting Rules Managerial accounting reports are only used internally within the organization; so they are not subject to the legal requirements that financial accounts are. Rules in financial accounting are prescribed by standards such as GAAP or IFRS . There are legal requirements for companies to follow financial accounting standards. 13 [email protected]

14. Financial Accounting Managerial Accounting Reporting frequency and duration As needed - daily, weekly, monthly. Defined - annually, semi-annually, quarterly, yearly. 14 [email protected]

15. Financial Accounting Managerial Accounting Purpose of Information Help managers plan and control business operations. Help investors, creditors, and other make investment, credit, and other decision. 15 [email protected]

16. Financial Accounting Managerial Accounting Nature of Information More subjective and judgmental, valid, relevant and accruable Objective, auditable, reliable, consistent and precise. 16 [email protected]

17. Financial Accounting Managerial Accounting Nature It’s classifies records, presents. It’s classifies records, presents. 17 [email protected]

18. 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. 18 [email protected]