Individual excercise 1

Individual excercise 1 - Q1 Identify five differences...

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Q1: Identify five differences between financial and managerial accounting. Reporting focus: Financial accounting is oriented toward the creation of financial statements, which are distributed both within and outside of a company. Managerial accounting is more concerned with operational reports, which are only distributed within a company. Standards: Financial accounting must comply with various accounting standards, whereas managerial accounting does not have to comply with any standards when it compiles information for internal consumption. Aggregation: Financial accounting reports on the results of an entire business. Managerial accounting almost always reports at a more detailed level, such as profits by product, product line, customer, and geographic region. Efficiency: Financial accounting reports on the profitability (and therefore the efficiency) of a business, whereas managerial accounting reports on specifically what is causing problems and how to fix them.
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