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Financial Accounting vs. Managerial Accounting Functions in Organizations

Discuss the role of the financial accounting and managerial accounting functions in organizations and some of their job responsibilities. What are some of the differences between the two and the type of reports they may each use?

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Financial accounting is a process of recording, summarizing, analyzing and interpreting the financial transaction of an organization. It mainly involves preparation of the financial statements and starts from journal ends with making of income statement and balance sheet. These statements are statutory compulsory to prepare for the organization. It mainly involves serving the external parties such as government, investors, lenders etc. of an organization. It serves as a base for the management accounting reports. These statements have to be periodically prepared as per the statutory prescription. Therefore a financial accountant's job is primarily to record the business transactions, prepare financial statements which show the working results of the organization for a given period and its financial condition at a given point of time.

Now the accountant's role and responsibility is increasing and also helps in providing all ...

Solution Summary

This solution discusses the roles of managerial and financial accounting and concludes based on two broad differences between their functions. This solution is 541 words.