Financial Accounting Designed To Supply Information In The Form Of

S.No. 1.

2.

3. 4.

5.

6.

7.

Basis of Difference Objectives

Management Accounting Designed for providing accounting information for internal use by the management.

Financial Accounting Designed to supply information in the form of P&L Account and Balance Sheet to the external users like shareholders, creditors, banks, investors and government. Analyzing Directs its attention to Portrays the position performance the various divisions, of business as a departments and whole with the help reports about the of financial profitability etc. of statements like each of them. income statement & Balance Sheet. Focus on time Concerned with Concerned with frame planning, strong reporting what has future orientation. happened in the past. Flexibility with Enjoys the flexibility Prepared on the basis respect to in preparation based of GAAPs (General accounting on the specific Accepted Accounting standards requirement and Principles) since it utility of the caters to the needs of management. outsiders. Emphasis on Speed is often more Events and precision important than transactions are precision. Use good recorded in precise estimates and values as they approximations. actually occur. Reference to Places considerable Only monetary non-monetary weight on nontransactions are events monetary data also recorded. like time lost due to break-down, weather conditions, expected entry of a competitor etc. Integration with Draws heavily from Basically a selfother disciplines other disciplines to contained subject. help the managers in the decision-making process.

8.

Reporting frequency and reporting compulsions

No compulsions.

9.

Nature

More subjective.

Time period assumption; Final accounts are prepared on annual basis; Quarterly and HalfYearly reports are also prepared; Compulsion to prepare and maintain financial accounts for tax, excise and other legal obligations. More objective.