Financial accounting involves the preparation of a businesss financial statements, mainly for users exterior the business. These reports are used by owners, potential owners of a business, and by people who have loaned a guild money. Some government agencies that regulate business and the stock market require companies to aim financial statements to them. Additionally, stockholders, suppliers, and banks also benefit from the financial reports that are generated. (Horngreen, Stratton, & adenine; Sundem, p. 5)
Managerial accounting helps managers plan and control a companys operations. Accountants prepare budgets to pull out managements goals in financial terms by identifying, measuring, accumulating, analyzing, interpreting, and communicating culture. subsequently a budget has been adopted, performance reports compare actual results with the budget. make up accountants help management keep track of how much it cost a company to make the product, or provide the service, it sells. (Horngreen, Stratton, & adenylic acid; Sundem, p. 5)
Rules and Regulations.
In financial accounting, it is limited by a widely trustworthy set of rules, standards, and procedures for reporting financial information known as the generally accepted accounting principles (GAAP), as established by the Financial Accounting Standards Board (FASB). This standard requires that a company account for all of their assets or economic resources according to their historical cost.
(Horngreen, Stratton, & Sundem, p. 6)
Managerial accounting does not require the implementation of the rules and procedures of the GAAP. focus of an organization can create any type of internecine accounting system that will work best for their company. However, they conduct to be aware of the costs that the implementation of such a system. (Horngreen, Stratton, & Sundem, p. 6) They also need to take into account the information that needs to be kept. More than one set of records is usually the norm.
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