Difference between financial accounting and management accounting

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Management accounting should not be construed as the new method of accounting; however, it refers to the application of accounting skills to the various problems faced by the management in the organizational functioning.

Management accounting can be said to include the use of all accounting techniques; financial and cost and also the use in appropriate situations relating to mathematical and statistical techniques. According to this stand point, the methods and techniques usually applied include:

Analysis of cash and funds flows;
Analysis and interpretation of financial statements with the help of accounting ratios and statistical measures;
Financial planning;
Trend analysis and business forecasting;
Capital budgeting;
Marginal costing;
Budgetary control and standard costing;
Operations research;
Performance and efficiency audit and
Reporting.

Financial accounting is concerned mainly with the historical aspects of external reporting, that is, providing financial information to outside parties such as investors, creditors and governments. For the purpose of protecting those outside parties from being misled, financial accounting is governed by what are called generally accepted accounting principles (GAAP). Management accounting on the other hand is concerned primarily with providing information to internal managers who are charged with planning and controlling the operations of the firm and making a variety of management decisions. Because of its internal use, management accounting is not subject to GAAP. More specially, the difference between financial and management accounting can be explained as detailed below:

Financial accounting is related to providing data for external users like shareholders, investors, government agencies, suppliers, customers etc. Management accounting provides data for the internal users.
Financial accounting is required as per the laws in force in the respective countries, where the management accounting is not mandatory by law;
Financial accounting is governed by generally accepted accounting principles, whereas management accounting is not subject to generally accepted accounting principles;
Financial accounting generates accurate and timely data whereas management accounting highly emphasizes relevance and flexibility of data;
Financial accounting emphasizes the past and it relates to the transactions regarding to income earned by the firm and expenditure incurred by the firm. Management accounting relies more emphasis on the future;
Financial accounting looks at the business as a whole; whereas, management accounting focuses on parts as well as on the whole of a business;
Financial accounting stands primarily by itself; whereas, management accounting draws heavily from other disciplines such as finance, economics and operations research;
Financial accounting has an end in itself; whereas, management accounting is a means to an end.

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We want to help you get that degree. Consider:

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  • GCU offers a variety of opportunities to reduce the cost of furthering your education. Campus students may qualify for scholarships, while online students can take part in limited special offers.
  • A regionally accredited university, GCU also holds specialized accreditations and approvals for some of our core program offerings.
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For 80 years, we’ve been preparing students for career success. We’ve led the wayso that our students can too.

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Purdue University, one of the nation's most respected universities, will acquire Kaplan University and create a new, nonprofit, public institution within the Purdue system. Pending regulatory approvals, this exciting transition is expected to take place later this year. This change will be seamless—during the transition, you will still be able to enroll at Kaplan University, earn a high-quality education, and meet your educational and career goals.

Programs:

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  • And more...
  • Specialized bachelor’s and master’s degrees that let you take more courses devoted to your field of interest, on average, than at other similar schools.
  • 4 out of 5 employers of an AIU business graduate say they would hire another AIU business graduate
  • Classes taught by industry specialists who bring a real-world perspective to the classroom
  • Business administration programs are accredited by the Accreditation Council for Business Schools and Programs (ACBSP) with the exception of Technology Management and Fashion Marketing specializations
  • MBA degrees can be completed in as little as 12 months

Programs:

  • Bachelor of Accounting
  • Bachelor's (BBA) - Accounting
  • Bachelor's (BBA) - Finance
  • Earn your degree online from Ashford University!
  • Choose from Undergraduate and Graduate classes
  • Business, Health Care, Psychology and Liberal Arts programs to choose from
  • Apply Now! Classes begin every Tuesday!

Programs:

  • BA Finance

CTU can help you connect to what matters most: a powerful professional network, faculty who are real-world professionals and innovative technology. And now several CTU degree programs are ranked by U.S. News Best Online Programs for 2015.  Are you in?

Programs:

  • Bachelor of Science in Accounting
  • Bachelor of Science in Business Administration - Finance
Get the hands-on training and skills it takes to succeed with Ashworth College, a respected, worldwide leader in distance education. Study at the times and places most convenient for you.

Programs:

  • Payroll Clerk
  • Online and ground-based program areas include Fashion Marketing and Management and more.
  • Students can study branding, event management, and public relations to help them prepare for a marketing career
  • Course topics include Fundamentals of Business, Brand Strategy, Project Management, and Principles of Market Research
  • Over 50 locations nationwide, with a student support team dedicated to helping students grow
  • Join our next Open House on 2/15!

Programs:

  • Marketing & Entertainment Management (BS)
  • Fashion & Retail Marketing (AS)
  • Online bachelor's programs include BBA, Criminal Justice, IT, Healthcare Management, Pscyhology & Public Health
  • Over 115 years of delivering quality education and personalized attention to students

Programs:

  • Business Administration (BBA)