Question

Distinguish between managerial and financial accounting on

1. Users and decision makers
2. Purpose of information.
3. Flexibility of practice.
4. Time dimension
5. Focus of information
6. Nature of information.

Short answer

S.no.	Base	Managerial Accounting	Financial Accounting
a	Users and decision-makers	Investor, Creditors.	Manager, employee.
b	Purpose of information	External user	Managers
c	Flexibility of practice	GAAP	No GAAP
d	Time dimension	Historical	Many projections
e	Focus of information	Organization	Projects
f	Focus of information	Monetary	Monetary and nonmonetary

Step-by-step solution

Meaning of Financial Accounting

The process of gathering financial data and creating financial statements is called financial accounting. It is the primary objective of a profit and loss statement to reveal an organization's profitability and losses.

Distinguishing between managerial and financial accounting

S.no.	Base	Managerial Accounting	Financial Accounting
a	Users and decision-makers	Investors, creditors, and other users external to the organization	Managers, employees, and decision makers internal to the organization
b	Purpose of information	Assist external users in making an investment, credit, and other decisions.	Assist managers in making planning and control decisions
c	Flexibility of practice	Generally accepted accounting principles (GAAP) regulate and structure financial reports.	Relatively flexible (no GAAP)
d	Time dimension	A minimum prediction based on historical information	A variety of projections and estimates are included, as well as historical information
e	Focus of information	The focus should be on the entire organization.	Describes the organization's processes, projects, and subdivisions.
f	Focus of information	Information about monetary policy	Most of the information is monetary; however, there is also nonmonetary information.