Q – Hi, please read the discussion below and prepare a Reply to this discussion post with
comments that further and advance the discussion topic.
Please provide the references you used.
Ensure zero plagiarism.
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Managerial accounting is used to offer financial information to managers inside a business to
assist them in making operational, planning, and strategic decisions. It is less regulated than
financial accounting and can use assumptions to give information to help make a decision.
Financial accounting is used to provide financial data to the users outside the firm such as
investors, creditors, and regulators. It is more regulated than management accounting and must
follow generally accepted accounting principles (GAAP) to ensure the accuracy and objectivity
of the information.
In the first scenario, the production manager is creating a budget for the upcoming period based
on assumptions and estimates which is clearly related to the managerial accounting principle
explained above.
In the second scenario, the reports are prepared according to GAAP and focus on the whole
business. The investor used financial accounting to research profitable companies. The reports
are clearly related to financial accounting as explained above.
In the third scenario, Deacon Corporation should use financial accounting for its purposes. To
guarantee that the bank gets correct information regarding the company’s financial status, the
financial statements must be prepared in accordance with GAAP.
In the last scenario, the financial statement should be prepared according to GAAP to make sure
that the same accounting procedures are used for all the expenses related to tax returns. In this
scenario, the financial accounting principle should be applied.
References :
Managerial Accounting vs Financial Accounting:
https://www.investopedia.com/ask/answers/041015/how-does-financial-accounting-differmanagerial-accounting.asp
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