Under financial accounting, business transactions are measured and reported in the form of financial statements. Generally accepted accounting principles (GAAP) are followed while preparing the financial statements. The users of the financial statements are usually the external users, such as investors, banks, suppliers, and government agencies.
A financial statement is a complete record of the financial transactions that takes place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company.
Management accounting measures, analyzes, and reports both financial and non-financial information. Such information helps managers to take effective decisions in order to attain the objectives of an organization. They not only help in planning the various activities of the organization but also in evaluating performance and taking corrective measures when there is a deviation from the charted path.
To state: The differences between management accounting and financial accounting.
The differences between management accounting and financial accounting are as follows:
Hence, the differences between management accounting and financial accounting are explained as above.