1. Describe briefly managerial accounting?

is concerned with the provisions and use of accounting information to managers within
organizations, to provide them with the basis to make informed business decisions that will
allow them to be better equipped in their management and control functions.

In contrast to financial accountancy information, management accounting information is:

• usually confidential and used by management, instead of publicly reported;

• forward-looking, instead of historical;
• pragmatically computed, instead of complying with accounting standards.

This is because of the different emphasis: management accounting information is used within
an organization, typically for decision-making.

Managerial accounting assists managers in carrying out their responsibilities, which

include planning, directing and motivating, and controlling.

Since managerial accounting is geared to the needs of the manager rather than to
the needs of outsiders, it differs substantially from financial accounting. Managerial
accounting is oriented more toward the future, places less emphasis on precision,
emphasizes segments of an organization (rather than the organization as a whole),
is not governed by generally accepted accounting principles, and is not mandatory.

Aims
1. Formulating strategies;
2. Planning and constructing business activities;
3. Helps in making decision;
4. Optimal use of resources;
5. Supporting financial reports preparation; and
6. Safeguarding asset

2. What is the difference of Managerial Accounting and financial accounting?

Managerial Accounting Vs Financial Accounting Management Accounting is used

primarily by those WITHIN a company or organization. Reports can be generated for any
period of time such as daily, weekly or monthly. Reports are considered to be "future
looking" and have forecasting value to those within the company. Financial accounting is
used primarily by those OUTSIDE of a company or organization. Financial reports are
usually created for a set period of time, such as a fiscal year or period. Financial reports are
historically factual and have predictive value to those who wish to make financial decisions
or investments in a company.
 1. Confidentiality and Type of Information. Management Accounting is the branch of
Accounting that deals primarily with confidential financial reports for the exclusive use of
top management within an organization. These reports are prepared utilizing scientific and
statistical methods to arrive at certain monetary values which are then used for decision
making. Such reports may include:

1. Sales Forecasting reports;

2. Budget analysis and comparative analysis;
3. Feasibility studies;
4. Merger and consolidation reports

Financial Accounting, on the other hand, concentrates on the production of financial reports,
including the basic reporting requirements of profitability, liquidity, solvency and stability.
Reports of these nature can be accessed by internal and external users.

2. Regulation and Standardization While Financial Accountants follow GAAP (generally

accepted accounting principles) set by professional bodies in each country, Managerial
Accountants make use of procedures and processes that are not regulated by a standard-
setting bodies.

However, multinational companies prefer to employ Managerial Accountants who have

passed the CMA certification. The CMA (Certified Management Accountant) is an
examination given by the Institute of Management Accountant, a professional organization of
Accounting professionals. This certification is different and distinct from the CPA or
Chartered Accountant certificate.

3. Time Period

Managerial Accounting provides top management with reports that are future-oriented, while
Financial Accounting provides reports based on historical information. However,
Management accountants based their reports on historical values, while employing statistical
methods to arrive at future values.

3– 4.What are the reports of financial accounting? Managerial accounting?

The purpose of accounting is to provide the information that is needed for sound
economic decision making. The main purpose of financial accounting is to
prepare financial reports that provide information about a firm's performance to
external parties such as investors, creditors, and tax authorities. Managerial
accounting contrasts with financial accounting in that managerial accounting is
for internal decision making and does not have to follow any rules issued by
standard-setting bodies. Financial accounting, on the other hand, is performed
according to Generally Accepted Accounting Principles (GAAP) guidelines.