Memorandum: In a memo to your new assistant.

Solution Preview

The response addresses the queries posted in 2192 words with references.

//Before writing about similarities and differences between the Financial Accounting and Managerial Functions in an Organization, we have to first of all, understand the meaning of the 'Financial and Managerial Accounting'. So firstly, we will write about both the terms under the heading of Introduction, for example: //

Memorandum

Date: April 8, 2009

To: New Assistant

From: XYZ

Subject: Financial and Managerial Accounting Introduction

Financial Accounting is defined as the accountancy field, which is mainly associated with the preparation of financial statements for various stakeholders i.e. shareholders, suppliers, banks, employees, Government agencies, owners, etc. This field of accountancy primarily deals with the systematical maintaining of the various accounts books, in order to key out the information related to financial status and profit of the business (Introduction to Accounting).

Managerial Accounting is that branch of accounting that renders vital data to the managerial staff to take effective decisions. It is very wide term because it covers the various areas such as cost accounting, budgetary control, inventory control, working capital management, etc., so that one can easily assess the information linked to the sales, purchase requirements, human resources needs, cash flows. It is the accounting technique that is quite helpful for the organization in carrying out main management functions such as planning, coordinating, directing, communicating and operating. This field of accountancy is interrelated with the internal reporting. Therefore, it is also known as the'Internal Reporting System' (Chadwick, 1993).

//After discussing the meaning of both the Accountings, which provide vital information to deal with the Company's financial and managerial matters; As per the directions, now we will discuss about the similarities between the Financial and Managerial Accounting, so that you can easily comprehend the concept, for example: //

Similarities between Financial and Managerial Accounting

Financial and Managerial accounting both are the two different fields of the accountancy. It is mainly similar in nature because the main information linked with financial and managerial accounting are collected in the same accounting system. Both the fields of accounting are basically pertained with responsibility of the managerial functions. The main resemblance between the both is that they both represent data from organizations, from basic accounting system; primarily it is the cost accounting system. For measuring the affect of unlike decisions, both the accounting fields employ the same unit of measure and universal mental lexicon. Thus, it is concluded that importance of both these accountings are equal in the business.

There are some essential aspects, which are same for the both financial and managerial accounting. These aspects are secrecy, competency wholeness and objectiveness. Both the accountings take in a professional documentation. The process of both the accountings includes identification, measurement, communication and evaluation of the company's financial performance information.

Within any organization, both types of accountings contemplate over similar financial dealings and both have the application of similar methods of accounting. The basic purpose of given two types of accountings is the preparation and analysis of the given data of financial nature. The various reports generated by financial and managerial accounting have the similar influence on the business decisions of the company. Ethical behavior is also an essential requirement for both the types of accounting. Both the fields of accountancy administer with economical consequences of a business concern (Managerial Accounting: Tools for Business Decsion Making). The quantification and communication of the economical consequences to the interest parties, is an essential ...