Difference Between Managerial Accounting And Financial Accounting

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Alston Manufacturing has very unique products, but none of the various owners throughout this case place enough emphasis on the key success factors to creating valuable products. These key factors are cost and efficiency, quality, time, and innovation (Datar, Horngren, & Rajan, 2012). The original owners of Alston along with Jeff, the second owner, fail to place enough importance on the cost and efficiency of operations. Joe, who purchased the right to produce a product Alston could not produce efficiently, also exhibited some of the same issues. To be specific, he failed to realize the importance of cost, efficiency and the quality of his product as well. The case of Alston Manufacturing illustrates how damaging it can be to a company when information presented does not remain true to the conceptual framework of accounting. This paper will discuss all of the various owners, their key decisions, and how those decisions affected others. Before we discuss this in further detail, it is important to explain the difference between managerial accounting and financial accounting, as both will be used explain information relevant to Alston. “Managerial accounting measures, analyzes, and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization.” (Datar, Horngren, & Rajan, 2012, p. 4) It is a type of accounting that helps managers decrease costs, improve processes, and increase profit. Financial accounting’s goal is much
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