Managerial and financial accounting

Category: Accounting

Last Updated: 10 Aug 2020

Pages: 2 Views: 361

Basically, both managerial and financial accounting are used persuasively in the process of organizational management. However, managerial accounting is basically used in the managerial process of the organization within the internal management process by the corporate managers. This is to imply that managerial accounting refers to the persuasive process of generating managerial reports that are used by the managers in creating and driving towards a productive outlay

On the contrary, financial accounting is useful in frontiers and limits that are beyond the outlay of the organization. This is to imply that the information produced through financial accounting is used by various stakeholders in making various investment decisions by the different stakeholders. Managerial accounting is basically referred to as cost accounting. This is because it incorporates the evaluation and application of all those processes that are used in utilizing the corporate resources in the most optimal manner to achieve precepts pf the highest levels of profitability. Read about emerging business environment in Nepal

Managerial accounting is basically used in the process of strategic business management to undertake activities in the most optimal processes that creates the highest benefits to the organization. Basically, managerial information is used in making performance and operational decisions by the managers on the internal functionality of the corporation. Managers will therefore make decisions such as the processes of production, methods and tools/machinery to use, the kind of technology to invest in and the models of product designs to incorporate in their activity Financial information is both useful to the internal management and the external corporate stakeholders. This is basically used in making investment decisions as well as evaluating the credit worth and status of the organization. Conceptually, both the internal and the external stakeholders use financial accounting in evaluating decisions about investment feasibility within the organization.

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