University of Phoenix
Desi Dostal, Margo Henderson, Shannon Murphy,
Diana Ortiz, Janel Wilder
April 11, 2011
Managerial vs. Financial Accounting
Financial statements provide general information on a company for both external and internal management use. For instance, a balance sheet outlines the total inventory while an income statement explains the cost of goods sold; however the cost of each individual product is not disclosed to the public. Internal managers need this thorough information to make vital decisions about business. An evaluation of managerial and financial accounting outlines the differences between the two sets of accounting.
Managerial accounting puts a strong emphasis on decisions that affect the future of its company. It is also the form of accounting not mandatory and is often debated on whether or not the information is useful and important (Accounting for Management, 2011).
In today’s world, managerial accounting is an important way for organizations to grow and measure its success by reaching their goals. Organizations do this by gathering data to prepare their budgets, costs and expenses, set their goals, and analyze their performances. Managerial accounting looks into trends, project expenses, company operations, and their productivity to help them to be successful (Ehow, 2011).
Monitoring trends allows a company to document the high and low peaks, as well as look into their company’s competition. Analyzing performance and productivity lets companies track their progresses and monitor areas of concern. Doing this helps to make better decisions on things a company needs to focus on and changing them to be more successful as well as making sure they continue to maintain the successful areas. This is finally compared to the budget to make sure the company stays on track and continues to be a successful and profitable company.
Financial Accounting... [continues]
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