Jose Miguel Vienes Mr.

Mark David Corpuz

BSBA-311

01 Activity 1

Comparative Analysis

Instructions: Read and analyze the scenario below. Write your answers on the space provided.
(3 items x 10 points)
Randel Ochoa was informed that he got promoted to a new position in their company. He was
pleased but uncomfortable because he is not well-versed about budget reports and financial
projections, as well as in planning and performance evaluation, which will be part of his main
tasks. He is planning to take a course in accounting to be able to do the tasks that will be
assigned to him. Meanwhile, he asked you, as the company’s cost accountant, to state five (5)
principal distinctions between financial and management accounting. Prepare your response to
Randel.
In the My Decision, write down which field of accounting will be more useful in Randel’s new
position.

Management Accounting
-the purpose of managerial accounting is to provide the internal users with the information that
may be used by managers in carrying out the functions of planning, controlling, decision
making, and performance evaluation.
-the focus of reports in managerial accounting is they often focus on sub-units or segments
within the organization
-they are some type of reports and it is the management reports which it tells about the budgets,
financial projections, cost analysis, etc...
-the managerial accounting has a regulation or standards of presentation which it is optional
since it is only intended for management use Management can set its own rules in producing
information that is most relevant to its needs.
-The period covered is the reports may cover any period as required by the management.

Financial Accounting
-the purpose of financial accounting is to provide the external users with information about the
organization’s financial position and financial performance
-in the focus of reports of financial management, they are focus on the business.
-the type of reports that financial management have is financial statements
-the regulations and standards of presentation of financial management, it is required and must
confirm to the Generally Accepted Accounting Principles (GAAP), PFRS or (Philippine Financial
Reporting Standards) and PAS or (Philippine Accounting Standards).
-the period covered in reports is usually cover a year, quarter, or month.

My Decision
-In my decision the useful field of accounting that suitable for Randel is the Financial
performance which it only cares about generating a profit and not the overall system of how the
company works. And focused on creating financial statements to be shared internal and
external stakeholders and the public. A business’ profitability and efficiency are reported through
financial accounting. Financial accounting is concerned with knowing the proper value of a
company’s assets and liabilities. This will be suitable for Randel and feel comfortable to do his
job/task.