Compare and contrast financial and managerial accounting Essay

Comp ar and contrast financial and managerial accounting - Essay ExampleThis memo outlines the differences between managerial accounting and financial accounting and the managerial Reports and Usefulness in Decision Making. The reports presented in this memo comprise of product cost reports, bud attract reports, mental process report, order information report and the business opportunity report. Differences between Managerial and Financial Accounting given over the fact that one of the duties of a manager is to contrive then it stipulates that management accounting has a substantial emphasis on the future. On the other hand, financial accounting fundamentally gives summaries of the previous financial transactions. The summaries ability be very important in the planning process, but only to a particular point. In this perspective, the future might not be a replication of the transactions that took place previously. Modifications are on a regular basis taking place in the fiscal c onditions thus the modifications call for planning which is based to a braggy extent on estimates of the transactions that will take place as opposed to the summaries of the transactions that receive already taken place (Needles, Powers & Crosson, 2010). Financial accounting information is always anticipated to b falsifiable and objective. Nonetheless, for internal purpose the manager demands data that is significant even if it is not totally verifiable or objective. By virtue of relevance, it implies that appropriate for the challenge at hand. For instance, it is hard to ascertain that estimated volume of sales for a proposed expansion of business into the foreign country but this is precisely the kind of data that is prevalently useful to managers in the process of decision making. On the other hand management accounting information system moldiness be adequately elastic to give any kind of information that is appropriate for any particular proposition decision (Teale, 2003). Ma nagerial Reports and Usefulness in Decision Making There are various managerial reports which are used in making important decisions in business. Such reports comprise of cost reports, surgical procedure reports, budget reports, business opportunity reports and order reports. These fictitious characters of reports have various uses in decision making process. equal Reports Management accounting makes calculations of the cost of goods and services being produced. This is possible through accumulation of costs of rude(prenominal) products, costs of overheads, labor costs and any other extra costs that might be tack together into consideration. The entire costs are then divided by the quantity of the products produced where the information is put into a cost report. Cost reports are significant methods for firms to adapt or learn which areas of a business are potentially valueable and areas that costs more money. When cost reports are made prior to the beginning of a project, the y give an efficient estimate of the likely cost of a project thus allowing the manager to plan and estimate the profit margin. Whenever the cost reports are made after the project has been finalized one can get a better insight of the maximum costs and the profit expected from the project. Use of the Report This type of report gives the managers the ability to see the constituent cost prices of products against the selling prices thus enabling them to determine the profit margin. Efficient cost reports gives quality information to enable managers see the significance