What are the main differences between financial and management accounting?
Financial accounting is mainly focused on the external users of the financial information. Its main purpose is to communicate the financial position of the company. Preparing the financial statements is mandatory and should follow certain accounting principles when presenting the financial information.
On the other hand, management accounting is mostly prepared for the management of the company and its main purpose is to prepare accounts that aids decision making. As such, they are optional and can be prepared and presented in any format that suits the management as a whole. Preparing management accounts are optional and is usually done on a need basis.
UF
Related Accounting A Level answers
All answers ▸How to tell if the transaction accounts are debit or credit
What is a liquidity ratio?
Raya has decided to depreciate her fixed assets. She has a printing press which was worth £500 at cost and is estimated to depreciate in value at 15% a year, Reducing balance method. Calculate the NBV at the end of year 3. Showing your working out.
What is ratio analysis and why is it being used?