Economics
Business Accounting and Bookkeeping
Financial Statements
The Difference Between

What is the difference between financial accounting and managerial accounting?

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2011-10-13 02:38:44

Managerial accounting is for internal users (those directly

involved in managing and operating and organization), while

financial accounting is for external users (those indirectly

involved in running an organization).

"Answer_2:" id="Answer_2:">Answer 2:

Management (or managerial) accounting is used for internal business

purposes. It includes lots of estimates and projections. It can be

very informal, if the managers so desire. It is used by people

inside the company to make decisions about the direction of the

company.

Financial accounting is for external users. It must be prepared

following standards laid out in GAAP (for US companies) or a

foreign equivalent. External users, such as investors, creditors,

suppliers, and customers use financial accounting information to

make decisions related to the company in question.


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