A-AS Level (CIE) Accounting Paper-2: Specimen Questions with Answers 14 - 14 of 53

Question 14

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State the difference between management accounting and financial accounting

Explanation

State the Difference between Management Accounting and Financial Accounting
S. noManagement AccountingFinancial Accounting
1.Management Accounting is primarily based on the data available from financial accounting.Financial accounting is based on the monetary transactions of the enterprise 2
2.It gives important information to the management to help them to execute the process of planning, controlling, performance evaluation and decision making.Its focus is on recording and classifying monetary transactions in the books of accounts and preparation of financial statements at the end of every accounting period.
3.Reports in management accounting are constructed for the use of management and as per the requirement of managementReports as per financial accounting are meant for the management as well as for shareholders and creditors of the concern.
4.Reports may contain both subjective and objective figuresReports should always be supported by the relevant figures and it emphasizes on the objectivity of data

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