Accounting Responses

Name:

Institution:
Replying to Richard

Richard, I agree with you that managerial accounting is meant for internal usage. We are on the

same page that managerial accounting information is subjective when it comes to accuracy. That

is primarily because it is the management that decides how it is prepared and reported. It is also

true that data in managerial accounting can be both financial and non-financial. One thing that is

vital about such information is that it is used for decision-making.

I concur that financial accounting information is intended for external users. You provided good

examples of the type of users’ creditors and suppliers are some of the external users that depend

on such data to make decisions about another firm. You make a crucial argument that Timeliness

is very important for financial accounting because it is a snapshot of how the company is

performing. We will appreciate that financial is historical nature because it reports the financial

position of a business at a particular time. Lastly, I agree that Raw materials start off as inventory

and do not become a direct cost until used for production.

Reply two

We are on the same page that managerial accounting focuses on generating information for

internal managers to plan, control, and make other company decisions. It is true that, unlike

financial accounting, managerial accounting does not have to abide by GAAP standards. I also

agree that financial accounting reports only financial data while managerial may focus on other

information. It is valid that Raw materials are simply the materials used in the direct production

of goods and direct labor is the amount of labor involved in producing the same. Overhead costs

entail expenses such as lighting and water, and all these are factored in the price calculation. Our

submissions agree that period expenses are costs incurred in the entire production time frame.