Chapter 1 - Chapter 1 Managerial vs. Financial Accounting...

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Unformatted text preview: Chapter 1 Managerial vs. Financial Accounting Managerial accounting is concerned with providing information to managers-that is, the people inside an organization who direct and control its operations. Financial accounting is concerned with providing information to stockholders, creditors, and others who are outside the organization. Managerial vs. Financial Comparison of Financial and Managerial Accounting Financial Accounting Managerial Accounting 1. Users External persons who Managers who plan for make financial decisions and control an organization 2. Time focus Historical perspective Future emphasis 3. Verifiability Emphasis on Emphasis on relevance versus relevance verifiability for planning and control 4. Precision versus Emphasis on Emphasis on timeliness precision timeliness 5. Subject Primary focus is on Focuses on segments the whole organization of an organization 6. GAAP Must follow GAAP Need not follow GAAP and prescribed formats or any prescribed format 7. Requirement Mandatory for Not external reports Mandatory 2-3 Financial Accounting • Reports past results • Aggregates results of entire company • Uses Generally Accepted Accounting Principles (GAAP) • Emphasizes stewardship of resources. Managerial Accounting • Is more forward- looking • Reports on products, segments and divisions • Does not have to follow GAAP, but does act ethically • Emphasizes Managerial vs. Financial Multiple Choice Questions!!!!Questions!...
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This note was uploaded on 03/27/2012 for the course ACCT 2302 taught by Professor Shall during the Spring '08 term at Texas A&M University, Corpus Christi.

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Chapter 1 - Chapter 1 Managerial vs. Financial Accounting...

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