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Which one is more significant in accounting.
Simply,
Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company.
Managerial accounting has its focus on providing information within the company so that its management can operate the company more effectively.
If you consult Investopedia.com , the key difference between financial and managerial accounting is that financial accounting aims to provide information to parties outside the organization whereas managerial accounting is aimed at helping managers within the organization to make decisions. Financial statement preparation using accounting principles is relevant to regulatory organizations such as tax authorities and financial institutions. On the other hand, if you have several business groups or business areas, or your legal entity operate in a multiple countries or geographies, a P&L and Cash Flow by business area or geography could help to analyze your business performance. Although P&L ´s by business area are not mandatory, they are a good example of managerial accounting reports. At the end, they would be more convenient to analyze your organizational performance and to trigger actions when and where required.
Financial accounting is the department where all financial and non financial transactions are recorded in books that is posting in ledgers.Managment accounting is a department where analysing the dats,ex making cost staements for different scenarios of production and analysing the feecebility, new projects viability etc.
Managerial accounting has its focus on providing information within the company, its primary requirements just only decision making and interpretation so that its management can operate the company more effectively. Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside or inside the company.
Managerial accounting is more concerned with operational reports, which are only distributed within a company Standards.
The financial accounting must comply with various accounting standards, whereas managerial accounting does not have to comply with any standards when it compiles information for internal consumption.
