Financial and Managerial Accounting

Financial and Managerial Accounting
Accounting may be referred to as the act of documenting, classifying and summarizing monetary transactions, business activities or events, and then interpreting the results. Entities use accounting information when they wish to keep track of their financial transactions for future references. For this matter, economic and management processes are two branches of an accounting system, where one stress on availing a correct and fair financial position of an organization. On the other hand, qualitative information is availed to the business leaders through managerial records, assisting construction of effective plans which aim at maximizing profit. Financial and administrative tools are essential for business performance, but both are used to serve an outstanding purpose as can be revealed from similarities and differences discussed below.
Similarities Between Financial and Managerial Accounting
Both financial tools are similar in that; they are financially focused on evaluating business performance and get used by internal management to assess the position of a business unit. Financial and managerial accounting have a specific set of individuals referred to as users, who require in-depth knowledge to understand an accounting theory. Therefore, both tools provide critical financial information to different users such as investors, lenders or creditors, who later decide on buying or lending resources.
Both financial and managerial accounting ge…