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MB0025 - Set 1

MB0025 - Set 1

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Published by: roohulameen on Mar 06, 2010
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07/13/2010

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F
INANCIALAND
M
ANAGEMENT ACCOUNTING
 
MB0025
 
S
ET 
– 
 
1
 MBA
– 
1 SEM
Name
Mohammed Roohul Ameen
 
Roll NumberLearning Center SMU Riyadh (
02543)
 Subject Financial and Management AccountingDate of Submission 15
th
August 2009Assignment Number MB0025
 
 
Mohammed Roohul Ameen
 
Roll Number:
 
 Assignment MBA 1
st
Semester
Subject:
MB0025
 
2
This page is intentionally left blank
 
 
Mohammed Roohul Ameen
 
Roll Number:
 
 Assignment MBA 1
st
Semester
Subject:
MB0025
 
3
1.
 
Explain the differences between Financial Accounting and ManagementAccounting.
Managerial accounting
is used primarily by those within a company or organization. Reports can begenerated for any period of time such as daily, weekly or monthly. Reports are considered to be "futurelooking" and have forecasting value to those within the company.
Financial accounting
is used primarily by those outside of a company or organization. Financial reportsare usually created for a set period of time, such as a fiscal year or period. Financial reports arehistorically factual and have predictive value to those who wish to make financial decisions orinvestments in a company.
Differences
Confidentiality and type of information
Management Accounting is the branch of Accounting that deals primarily with confidential financialreports for the exclusive use of top management within an organization. These reports are preparedutilizing scientific and statistical methods to arrive at certain monetary values which are then used fordecision making. Such reports may include:
 
Sales Forecasting reports
 
Budget analysis and comparative analysis
 
Feasibility studies
 
Merger and consolidation reportsFinancial Accounting, on the other hand, concentrates on the production of financial reports, includingthe basic reporting requirements of profitability, liquidity, solvency and stability. Reports of thesenatures can be accessed by internal and external users such as the shareholders, the banks and thecreditors.
Regulation and standardization
While financial accountants follow Generally Accepted Accounting Principles (GAAP) set by professionalbodies in each country, managerial accountants make use of procedures and processes that are notregulated by standard-setting bodies.

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