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Financial and Business Accounting

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Financial And Business Accounting

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Category: Business
Autor: anton 01 December 2010
Words: 1039 | Pages: 5
Financial accounting is defined as measuring and recording business transactions and providing financial statements that are based on generally accepted accounting principles. It focuses on external reporting. The purpose of financial accounting it to aid accounts in their function of overseeing an organizations financial assets. The central outputs of financial accounting are audited financial statements such as balance sheets and income statements. Financial accounting is geared toward providing information to parties outside the firm, for example prospective shareholders.

By contrast, managerial account which measures and reports financial and non-financial information tat helps managers make decisions to abide by the goals of an organization. It focuses on internal reporting. The tools used by managerial accountants to meet their goal of decision support are such things as budgets, activity-based costing and financial planning. Managerial account is designed for internal use by firm’s managers. Cost accounting is a subset of the more inclusive area of managerial accounting. Cost accounting deals with the “how to� of determining the cost of a cost object. A cost object is simply anything, be it a product, service, responsibility center, that the company chooses to determine the cost of.

Managerial accounting emphasizes the measurement, analysis, communication, and control of financial and non-financial accounting information. The organization

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