Managerial and Financial Accounting

Essay by crazy123College, UndergraduateA, December 2008

download word file, 4 pages 4.7

Managerial and Financial Accounting Paper � PAGE �1�

Running Head: Managerial and Financial Accounting

Managerial and Financial Accounting Paper

Team A

University of Phoenix-Austin

ACC/300 Principles of Accounting

Managerial and Financial Accounting Paper

In today's corporate world, it is common to find financial statements relating to managerial and financial accounting. The financial statements are critical to both external users of the corporation as well as internal managers within the corporation. The purpose of this paper is to define the differences between managerial and financial accounting, identify the users of managerial and financial accounting, and describe what kind of business decisions the users make with the information.

Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals (Investopedia, 2008). Managerial accounting is concerned with providing information to managers inside the organization and those who directly control the company's operations. The management team strives to create value for the organization by managing resources, activities, and people in order to attain the organization's goals effectively.

The main objective of managerial accounting is to motivate managers and other employees to direct their efforts towards achieving these goals (Gillet, 2000). The organization's overall goals are accomplished by communicating the plans, providing a measurement of how well the plan was achieved and giving proper explanations of the differentiations from the original plan. Managerial accounting information includes financial and non-financial data to help managers with strategic planning and decision-making such as the cost of products, budgets, and cash flows (Gillet, 2000). The management team also compares actual costs incurred with those specified in the budget such as analyzing and comparing actual performance to budget plans (Gillet, 2000). A vital role of managerial accounting is frequently to review how the company compares with the competition. By comparison, this...