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Describe difference between financial and managerial account

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How would you describe the difference between financial and managerial accounting? What are the distinguishing features of managerial accounting?

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Solution Summary

In a 494 word cited solution, the reponse presents a clear discussion about the differences in terms of function, responsibility and risk.

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Managerial or cost accounting is an internal function which allows management and operations people to judge the efficiency and effectiveness of their departments or operations. Often associated with manufacturing or process costing, cost accounting can be used in most any business.

The real benefits of cost accounting are cost savings. It is impossible to evaluate costs without the detailed information about the nature and classification of the costs. The job of the cost accountant is to categorize costs by some internal reporting process which will provide managerial information to judge internal functions. It is a process which subdivides total costs by function, process or department. In this view, cost accounting is a detailed breakdown of total costs into categories which are important or necessary for a company to understand and evaluate ...

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