Managerial and financial accounting

Managerial and financial accounting

Introduction

Accounting is a vital part of any business. Used to create budgets, keep track of assets and liabilities of the company and provide an overall picture of the financial health of the business. There are many types of accounts that a company uses, two of which are financial and managerial. Although both serve the same purpose, the audience for each is different.

The two main areas of accounting are financial accounting and managerial or cost accounting. The first usually involves the issuance of the financial statements to third on a common language. Today it is trying to be the common language IFRS. Cost accounting and management, however, has more to do with the future, with management. The first is an accounting that has more to do with the past. An accounting that records the facts and try to expose them. The second has more to do with the future of the company from management.

Discussion

Financial accounting

Financial accounting is used to generate reports and statistics detailing financial health to external interests. These third parties include shareholders, venture capitalists and mortgage lenders. It allows them to see how your investment and may help them decide to remain shareholders, investing more in the company or remove their assets and invest elsewhere.

Financial accounting is primarily concerned with the financial statements for external usage, refers to information describing the resources, obligations and financial activities of an economic entity. The financial accounting information is primarily designed to help investors, creditors and other external users. The users of financial accounting information include: proprietary, creditors, unions, offices and government ministries, suppliers, customers, trade associations, and general audience (Lafond & Roy, 2008).

Main feature of financial accounting is reporting to third parties on the financial transactions of the company. Be responsible for all business operations in a systematic, historical and chronological manner. Must necessarily be implemented in the company to promptly report the facts developed. The business language is used, (At present, many countries have implemented IFRS and others are via implantation. IFRS will be the universal language of financial accounting). It is based on rules, principles and accounting for recording financial transactions of a business. Describe operations in analytic gear of double entry bookkeeping.

Cost accounting or management

Management accounting is done for internal shareholders and the management team. Used for daily business operations. This information would be used to determine selling prices, premiums and ...