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Question: Reply to students responce in 150 words
Since accounting has many terms and can be quiet confusing, so I was glad that the textbook broke it down like this:
Financial Accounting is done for people outside of the organization that make decisions. This would include stockholders, suppliers and banks just to name a few. Where as Managerial Accounting is for the people that decisions inside the organization. This would include managers, executives, and others.
As far as which one is better, I think it depends on where you stand in relation to the company. As a shareholder, I would say that financial accounting is more important because it allows me to see whether they are worth investing money into. As the CEO of the company, I would value both because I want businesses to want to do business with me and shareholders to invest in the company but the managerial accounting for the CEO may take the slightest bit of priority because it drives the way you do business, what products you sell, whether your business will be able to sustain itself, and if not what changes can be made to fix whatever the problem is.
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