Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 1 - Financial Accounting and Accounting Standards - Questions: 1

Answer

Financial accounting is the process that culminates in the preparation of financial reports on the enterprise for use by both internal and external parties. Managerial accounting is the process of identifying, measuring, identifying, measuring, analyzing, and communicating financial information needed by management to plan, control and evaluate a company's operation.

Work Step by Step

Depending on the primary users and the purpose of the reports, managerial accounting and financial accounting have some differences. The primary users of financial accounting are external users, stockholders, creditors, and regulators. But for managerial accounting, the primary users are internal users, officers, and managers.
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