Chase_6615_ch1 - Andrew Chase Intermediate Accounting...

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Andrew Chase Intermediate Accounting Chapter 1 1-1 The main difference between financial and managerial accounting is that financial accounting mainly provides information to parties outside an organization, and managerial accounting is used help management within an organization make decisions. Financial accounting is the process of preparing financial reports of a business for both internal and external parties. Some of these parties include investors, creditors, unions, managers, and government agencies. Managerial accounting is used to identify measure, analyze, and communicate financial information needed by management to plan, control, and evaluate the operations of a company. Also, most of the information is not available to the public compared to financial accounting. 1-3 Accounting helps the capital allocation process by providing investors with reliable and fair information about companies, which allows investors to compare income and assets of such companies.
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