Distinguish Between Financial and Management Accounting

The difference between financial and management accounting is that the former is prepared for external users while the latter serves internal users. If you ask around what the difference is between financial and management accounting, most people will reply that they are used for different purposes. However, this claim is only partially true. Both types of accounting are used in business as a means to fulfill specific needs. If you want to understand the difference between financial and management accounting, consider the following article your ultimate guide. What Is Financial Accounting? Financial accounting is the type of accounting used to prepare financial statements for external users. The purpose of financial accounting is to record and summarize all financial transactions so that they can be presented in financial statements. These reports are used to provide an overview of a company’s financial position, so they should be accurate and truthful. The following financial stateme...