Introduction to Management Accounting Terms and Examples
Introduction to Management Accounting Terms and examples
Accounting is the process of analyzing and recording transactions for the purpose of preparing reports for statutory reporting, decision making and control. Types of accounting
Bookkeeping is the recording of financial transactions. Transactions include sales, purchases, income, receipts and payments by an individual or organization. Bookkeeping is usually performed by a bookkeeper. Bookkeeping should not be confused with accounting. The accounting process is usually performed by an accountant. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper
Financial accounting
Reporting of the financial position and performance of a firm through financial statements issued to external users on a periodic basis.
Management accounting
Management accounting is the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization 's goals.
This is also known as "cost accounting."
The differences between management accounting and financial accounting include: 1. Management accounting provides information to people within an organisation while financial accounting is mainly for those outside it, such as shareholders 1. Financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as International Financial Reporting Standards. 1. Financial accounting covers the entire organisation while management accounting may be concerned with particular products or cost centres.
Taxation accounting
Accounting methods that focus on taxes rather than the appearance of public financial statements. Tax accounting is governed by the country 's taxation laws which dictates the specific rules that companies and individuals must follow when preparing their tax returns. Tax principles often differ from
Accounting is the process of analyzing and recording transactions for the purpose of preparing reports for statutory reporting, decision making and control. Types of accounting
Bookkeeping is the recording of financial transactions. Transactions include sales, purchases, income, receipts and payments by an individual or organization. Bookkeeping is usually performed by a bookkeeper. Bookkeeping should not be confused with accounting. The accounting process is usually performed by an accountant. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper
Financial accounting
Reporting of the financial position and performance of a firm through financial statements issued to external users on a periodic basis.
Management accounting
Management accounting is the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization 's goals.
This is also known as "cost accounting."
The differences between management accounting and financial accounting include: 1. Management accounting provides information to people within an organisation while financial accounting is mainly for those outside it, such as shareholders 1. Financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as International Financial Reporting Standards. 1. Financial accounting covers the entire organisation while management accounting may be concerned with particular products or cost centres.
Taxation accounting
Accounting methods that focus on taxes rather than the appearance of public financial statements. Tax accounting is governed by the country 's taxation laws which dictates the specific rules that companies and individuals must follow when preparing their tax returns. Tax principles often differ from