Free

Financial Accountants vs Managerial Accountants - Coursework Example

Comments (0) Cite this document
Summary
Financial Accountants vs Managerial Accountants What are the differences between financial and managerial accounting? The two primary objectives of a business are to earn a profit and to remain solvent. Solvency of a firm represents the potential of the firm to finance its debt and pay the bills…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
Financial Accountants vs Managerial Accountants
Read TextPreview

Extract of sample "Financial Accountants vs Managerial Accountants"

Financial Accountants vs Managerial Accountants What are the differences between financial and managerial accounting? The two primary objectives ofa business are to earn a profit and to remain solvent. Solvency of a firm represents the potential of the firm to finance its debt and pay the bills. Financial accounting can be stated as the reporting of the position of the financial position of the firm as well as the performance through financial statements across time. Management accounting can be defined as the provision as well as use of accounting information to the managers which will provide them a basis to take the appropriate decisions of business and allow them to get equipped with control functions. Financial accounting is useful for those who belong to outside of a company or organization (Stickney, Weil, Schipper and Francis, 2009). Financial accounting involves some predictive values which acts as the indicator to the investors who wish to invest in the concerned company. On the other hand, management accounting primarily deals with confidential reports regarding to finance. The reports are generated with the help of some statistical methods and other scientific rules. The generated monetary values are then used for the purpose of decision making. Management accounting is primarily forward looking instead to being historical. Financial accounting serves its utility to the shareholders while management accounting provides information to the top management for effective functioning of the business. The financial accounting statements are required by law while management accounting is exempted. There are some specific formats and standards are necessary for statutory accounts like the International Financial Reporting Standards. The entire organization is covered in financial accounting while the boundary of management accounting can be restricted to only some particular products (University of North Florida, n.d.). In financial accounting emphasis is put on the summaries of the financial consequences of historical activities while management accounting consists of decisions that can affect future. In financial accounting the objectivity and validation of relevant data is emphasized while in management accounting the relevant items relating to decision making is emphasized. Financial accounting is of more importance to potential investors while the importance of management accounting lies to the managers of the organizations. Describe the types of reporting used by financial and managerial accounting There are three types of reports that are used by financial accounting namely the income statement, balance sheet and the statement of cash flow. All items of income and expense are showed in the income statement. The income statement reflects a time period. The income statement is also regarded as the profit and loss statement of the firm. The health of the business from the starting day till the date when the balance sheet is prepared is reflected in the balance sheet. The accounting system is based on the double entry book keeping system and so every entry into the books there is equal and opposite entry. Therefore, the net effect is zero and the resultant is balanced books. The entry and exit of cash during the reporting period is reflected in the statement of cash flow. One can gain a through idea of the ability of the company to pay dividends as well as meet the obligations from statement of cash flows. The statement of cash flow takes into account the aspects of income statement as well as the balance sheet. The types of managerial accounting are variance analysis, Cost analysis, return on investment, projections, and balanced scorecard. The difference between the estimates and the projections is reflected in Variance analysis. The planning process is analyzed by the company through projection variance analysis. The total cost analysis as well as the life cycle cost analysis deals with the cost of the business process. These types of cost analysis are important to determine the profitability of the company. A sophisticated managerial accounting system includes more reports like indirect expense analysis, the costs of accounting a project, calculation of the opportunity costs as well as some other ways where the company can invest money. The activity based costing divides each product into unit level activities, batch level activities, product sustaining activities and facility sustaining activities. The return on investment calculates the ratio and direct returns and is included in the cost analysis. The projections include estimates regarding demand, sales, expenses, staffing and necessary resources. This part is the most complex part of managerial accounting and is usually built with the help of complex modeling. The balanced scorecard combines the standard financial measures with the perspective of consumer satisfaction. References University of North Florida, (n.d.). Introduction to Managerial Accounting. 1. Stickney, C., Weil, R., Schipper, K. and Francis, J. (2009). Financial Accounting: An introduction to concepts, methods and uses. South Western Cencage Learning. 3. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial Accountants vs Managerial Accountants Coursework”, n.d.)
Financial Accountants vs Managerial Accountants Coursework. Retrieved from https://studentshare.org/finance-accounting/1454374-financial-accountants-vs-managerial-accountants
(Financial Accountants Vs Managerial Accountants Coursework)
Financial Accountants Vs Managerial Accountants Coursework. https://studentshare.org/finance-accounting/1454374-financial-accountants-vs-managerial-accountants.
“Financial Accountants Vs Managerial Accountants Coursework”, n.d. https://studentshare.org/finance-accounting/1454374-financial-accountants-vs-managerial-accountants.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Financial Accountants vs Managerial Accountants

Forensic Accountants as Fraud Buggers

...to interpret accounting information and financial evidence to back misappropriation of resources within a business organization or company (Fleming, Pearson, Riley & Richard, 2008). Fraudsters within companies and business organizations often devise methods of embezzlement or fraud that are hard to detect. It is in this regard that a forensic accountant must have effective investigative skills to detect accounting problems which would not be determined by ordinary auditing and accounting approaches (Bawaneh, 2011). Investigative skills also allow a forensic accountant to adhere to the ethics and regulations that govern investigations of...
6 Pages(1500 words)Case Study

Accountants and Management Accountants

...., 2007, A comparative analysis of activity-based costing and traditional costing, World Academy of Science, Engineering and Technology. Atrill, P. and McLaney, E. (2012) Management accounting for decision makers. 6th ed., Harlow: Financial Times Prentice Hall. Drury, C. 2012. Management and cost accounting, 8th ed., London: Thomson Learning. Hoare, R, 2011, Absorption Costing V’s Marginal Costing, Formation 2 Management Accounting. Horngren, C.T., Bhimani, A., Foster, G. & Data, S.M., 2011. Management and cost accounting, 5th ed., Harlow; Financial Times Prentice Hall. Ozbayrak, M, Akgun, A and Turker, A. K., 2004. “Activity-based cost...
8 Pages(2000 words)Essay

Recruiting and retaining women accountants

...similar to other CPA company. Moreover, it can be stated that the same problems concern the whole CPA industry; that is recruitment, retention and promotion of qualified women accountants into managerial positions is hindered with inability of CPA companies to provide employees with a suitable work schedule offering the desired work-life balance. The following background information gives more detail on these issues. The role of women in CPA firms has changed significantly over the last 20 years. The whole new dimension that women have brought into accounting profession was about being more relationship-focused. But even more importantly, leadership roles are often taken by women at CPA...
12 Pages(3000 words)Essay

Quantitative Methods for Accountants

...QM Assignment 2 Answers to be handed in: a) Let X1, X2 and X3 be Quantity Produced for each of the products A, B and C correspondingly. In general form, the maximisation of total contribution to profit can be rewritten as the maximisation of sum of contributions to profit for each type of product: Max: Contribution A + Contribution B + Contribution C; Or as follows: Max: Unit Contribution A* X1 + Unit Contribution B*X2 + Unit Contribution C*X3; Unit Contribution = Selling Price - Variable Costs = Selling Price - Labour Cost - Machine Time Cost - Raw Material Cost; Given the input data concerning Consumption of resources by product (see Table 1 below), Cost of resources (Table 2) and Selling price by product (Table 3), we can... Assignment 2...
3 Pages(750 words)Math Problem

Auditing Ethics among Public Accountants

...monopoly and the right to place restrictions on the form of practice. Professional associations are therefore unable to dictate the organizational forms through which nonauditing services, such as tax preparation and consulting, are provided. In the past few years several publicly held "consolidators," including American Express and H&R Block, entered the public accounting market by acquiring the nonattestation practices of Auditor firms. Given that the performance of attestation engagements is restricted to traditional Auditor firms, the consolidators developed a variety of approaches that allow the Auditor firm and the financial services corporation to legally coexist subsequent to the consolidation...
14 Pages(3500 words)Essay

Accountants

...Accountants in today's organizations have manifold roles to perform. With the advent of software programs for accounts preparation, accountants no longer only deal with finalizing of accounts or preparation of tax returns. There roles have evolved from reporters to those of finance and investment planners and advisors. The job opportunities for accountants in all types of public and private sector organizations continue to grow. Accountants are strategic providers of financial information on the basis of which decisions are taken. However at present they not only are the providers of information regarding the past...
2 Pages(500 words)Essay

Information Systems for Accountants

...Project management is an imperative component of a planners tasks. Managing a project includes two essential steps, project planning, and project tracking. A project consists of several tasks, each of a certain duration that is to be carried out in an interrelated sequence. Project planning is the initial stage of project management, here is where the planner identifies the work or the task involved to complete the project. The planner will manually estimate the duration or the time each task will consume, approximate the cost of each task, determine the workers and equipment to use, and arrange the sequence of the task. As the project progresses, some of these tasks may change due to unforeseen or miscalculated circumstances... management...
8 Pages(2000 words)Essay

Future of Forensic Accounting and Accountants

...organizations. This takes us to our discussion regarding the future aspects of forensic accounting and the role of forensic accountants in the light of the current events and endless possibilities and opportunities in the profession. The current economic recession has yet again revealed the weaknesses in the corporate structure which is under pressure to sustain itself and the crisis which started from prime loans and credit crisis in the financial sector did not take long time to spill over its adversities to other sectors in the US. Similar conditions also prevail in other countries in particular European and Far Eastern countries which rely heavily on US interests in these countries....
3 Pages(750 words)Essay

Company law for accountants

...Introduction Formation of company is a matter of legal formality and contracts are legal obligations by which companies that are legal, ascertain their legal status. Contracts forms the basis of formalities involved in company formation. A company will not be able to enter into a contract without being incorporated and a certificate of association given. Any company that enters into contracts prior to its existence should be prepared to suffer the consequences should the other party involved fails to honor it. Pre-incorporation contract that exist before the formation of a company are entered into by promoters of a company before the company is incorporated. Promoters are involved in the formation of a company and deal... Formation of company ...
10 Pages(2500 words)Essay

INTRODUCTION TO LAW FOR ACCOUNTANTS

...INTRODUCTION TO LAW FOR ACCOUNTANTS College: Introduction to Law for Accountants The accounting discipline has become one of the widely used disciplines in recent times globally. Accountants are adequately equipped with knowledge in management accounting, financial accounting among others. At the operational levels, the enactment of law into accounting provides an effective tool to support an effective implementation of strategies. Legal Knowledge has hence become an essential element in accounting (Bromwich and Hopwood, 1992, p. 15). The law for accountants entails different laws such as, the law of tort, the employment law, company law, corporate governance law among other laws. In reference to the case given, the concerned law... of...
3 Pages(750 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Coursework on topic Financial Accountants vs Managerial Accountants for FREE!

Contact Us