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What is the difference between financial accounting and managerial accounting?


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Answered 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: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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