Financial Accounting

Category: Education

Presentation Description

Basics of financial management


Presentation Transcript

Financial Accounting:

Financial Accounting Accounting for managers -By Unnati P. Thakkar

Management Accounting:

Management Accounting Areas of Accounting Accounting functions Concept of Financial Accounting

Functions of Financial Accounting:

Functions of Financial Accounting Recording: journal & subsidiary books Classifying & summarizing 1. Trial balance 2. Profit & loss A/C 3. Balance sheet Interpreting Communicating

Accounting Concepts:

Accounting Concepts Business Entity concepts Going concern concept Money measurement concept Cost concept Dual aspect concept Realisation concept Accrual concept

Limitations of Financial Accounting:

Limitations of Financial Accounting Change in nature of Business Post mortem model Effect of government interference

Management Accounting Scope & functions:

Management Accounting Scope & functions Management accounting definition suggested by American accounting association is, “Mgt. accounting is the application of appropriate techniques and concepts in processing historical & projected economic objectives and in making of rational decisions with a view toward these objectives”

Scope of Management Account:

Scope of Management Account establish, coordinate & administer compare performance administer tax supervise & coordinate fiscal protection for assets continuous appraisal

Functions of mgt. accounting:

Functions of mgt. accounting control functions Planning functions Finance function

Lesson 2:

Lesson 2 Financial Accounting VS Management Accounting


Objectives Financial accounting is primarily an external reporting process while mgt. accounting is primarily an internal reporting process Financial accounting provides information to external parties while mgt. accounting provides information for internal use by mgt.

Analysing Performance:

Analysing Performance FA cannot reveal what part of the mgt. action is going wrong but MA provides analytical data for these purpose FA measures overall performance of the business as a whole whereas MA directs its attention to the various divisions, dept. of business.

Data used:

Data used FA use monetary past data whereas MA uses present as well as past data for future mgt. decisions

Monetary Mgt.:

Monetary Mgt. In FA only economic events find place in terms of money whereas MA is interested in non economic events such as technical innovations & changes in the value of money

Periodicity of reporting:

Periodicity of reporting the period in FA is much longer i.e. for 1 year or half yearly MA furnishes information quickly and at comparatively short intervals

Precision , Nature & legal compulsion:

Precision , Nature & legal compulsion less precision is maintain in MA compare to FA Nature FA is objective whereas MA is subjective Legal Compulsion FA is compulsory for every business whereas MA is not complusory

Qualities of Mgt. accountants:

Qualities of Mgt. accountants He should be acknowledge of concern firm He should be aware of the concern industry He should be aware of competitor as well as competitors policies He should be capable of taking decisions in any situations. He should be able survive in changing environment He should be capable of providing information's to all level of mgt personnels as well as outsiders as an when needed.

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