Managerial Accounting

Question 1

1 . Managerial accounting is not governed by accounting standards and principles . Techniques and systems are developed by looking at most commonly adopted methods in organizations . Therefore , such d is less sharply defined

2 . Managerial accounting as outlined by its name is more linked to the business needs of management . Indeed a central tenant of management accounting is to provide financial information to managers to aid them in their economic decision . Financial accounting is more targeted towards the need of external users . The financial information conveyed in financial accounting

is more in aggregate terms and such information would not be suitable for management . Management is more interested in financial information separated in accordance to products and divisions to aid in controlling and planning purposes . Therefore , such aspect is more closely related to management accounting

3 . A key difference between financial accounting and management accounting is that financial accounting is regulated by accounting standards and principles . Management accounting moves more along best practice and provides room for a lot of flexibility . However , financial accounting is more restricted with the aforesaid standard , which provides frameworks on the presentation of financial reports and the accounting treatment of items . Therefore , financial accounting has less flexibility

4 . The information needs of management are more detailed that those of external users , because they are directly engaged in the operations of the organization . Therefore , detailed and numerous reports are necessary to accommodate such needs linking it to management accounting

5 . Financial accounting reports are based on...