Management accounting, Financial Management

Management Accounting:

Management accounting on the other hand tends to focus internally. Reports generated through management accounting processes will be used by the organisation's management to assist in planning and control.

Rather than focusing on the past (as is the case with financial accounting), management accounting attempts to take information from the past and projects it into the future. The primary management accounting report is the budget, and reports analysing actual results against budgeted targets.Management accounting uses historical data to assist in establishing financial objectives, and allows managers to make rational management decisions to achieve those objectives.

Management accounting reports usually provide great detail and cover much shorter periods of time (sometimes weekly).  This allows managers to act quickly and decisively if required.

The major differences between financial and management accounting can be summarised as follows:

Financial Accounting

Management Accounting

Information for external users

General purpose

Long time periods (FY)

Reports on the past

Required by law

Subject to accounting standards

Focuses on objective data

Used primarily by internal users

Usually focused on specific purpose

Short periods (monthly, weekly)

Past and future

Not required by law

Not compelled to meet standards

Can utilise subjective data

Posted Date: 10/1/2012 3:57:29 AM | Location : United States







Related Discussions:- Management accounting, Assignment Help, Ask Question on Management accounting, Get Answer, Expert's Help, Management accounting Discussions

Write discussion on Management accounting
Your posts are moderated
Related Questions
Your construction company is evaluating the proposed acquisition of a new earthmover. A consulting company you hired developed the following analysis last year at a cost to you of

a)  What two legal documents should the couple ensure are up-to-date if they want a sound estate plan?  What would happen if either became incapacitated or died and didn't have any

Offshore Financial Center It is a location with banking facilities to accept deposits and make loans in currencies various from the currency's country of origin. Banks located

Ashok is to receive an amount of Rs. 15,00,000 from his relative after 3 years. He wants to buy a house for which he wants the money to be paid now. His relative had already invest

Which is lower for a given company:  the cost of debt or the cost of equity?  Explain.  Ignore taxes in your answer. The cost of debt is all the time less than the cost of equi

It is the exercise price at which the investor or the bondholder exchanges the bond for shares.

Current Liabilities: A liability is an obligation to convey assets or do services at some future date. For purposes of balance sheet analysis, it is important to create a dist

a) Marketing might be vital to an organisation such as WHSG for several reasons, including: • The need to be a focus for the right kind of students to the school (there are riva

Q. Security Required in Bank Finance? 1) Hypothecation: Under this arrangement, the borrower is provided with working capital finance by the bank against the security of mova

Bond valuation would be relatively simple if interest rates exhibit little day-to-day volatility. One could value a bond by discounting each of its cash flows at