Get premium membership and access questions with answers, video lessons as well as revision papers.
a) Objectives
The main objective of financial accounting is to supply information in the form of profit and loss account and balance sheet to outside parties like shareholders, creditors, government etc.
The main objective of management accounting is to provide information for the internal use of management.
b) Performance
Financial accounting is concerned with the overall performance of the business.
Management accounting is concerned with the departments or divisions. It report about the performance and profitability of each of them.
c) Data
Financial accounting is mainly concerned with the recording of past events.
Management accounting is concerned with future plans and policies.
d) Nature
Financial accounting is based on measurement.
Management accounting is based on judgment.
e) Accuracy
Accuracy is an important factor in financial accounting.
Approximations are widely used in management accounting.
f) Legal Compulsion
Financial accounting is compulsory for all joint stock companies.
Management accounting is optional.
g) Monetary transactions
Financial accounting records only those transactions which can be expressed in terms of money.
Management accounting records not only monetary transactions but also non- monetary events.
h) Control
Financial accounting will not reveal whether plans are properly implemented.
Management accounting will reveal the deviations of actual performance from plans. It will also indicate the causes for such deviations.
i) Stock Valuation
In financial accounting stocks are valued at cost or market price which is lower.
In Management accounting, stocks are valued at cost or realizable value, whichever is lesser.
j) Analysis of Profit and Cost
Financial accounts reveal Profit of Loss for a particular period.
Management Accounting is concerned mainly with analysis of profits or loss for a particular period.
Lellah answered the question on November 8, 2021 at 13:29
- Outline the differences between cost accounting and management accounting.(Solved)
Outline the differences between cost accounting and management accounting.
Date posted: November 8, 2021. Answers (1)
- Outline the advantages of management accounting.(Solved)
Outline the advantages of management accounting.
Date posted: November 8, 2021. Answers (1)
- Discuss the Scope of Management Accounting .(Solved)
Discuss the Scope of Management Accounting .
Date posted: November 8, 2021. Answers (1)
- What are the objectives of management accounting?(Solved)
What are the objectives of management accounting?
Date posted: November 8, 2021. Answers (1)
- State and explain the characteristics/nature of management accounting.(Solved)
State and explain the characteristics/nature of management accounting.
Date posted: November 8, 2021. Answers (1)
- Methods of product costing(Solved)
Methods of product costing
Date posted: October 12, 2021. Answers (1)
- Discuss the techniques of investment evaluation(Solved)
Discuss the techniques of investment evaluation
Date posted: October 12, 2021. Answers (1)
- Describe the contemporary approaches to variance analysis(Solved)
Describe the contemporary approaches to variance analysis
Date posted: October 12, 2021. Answers (1)
- Describe two approaches used to compute variances(Solved)
Describe two approaches used to compute variances
Date posted: October 12, 2021. Answers (1)
- Describe two methods of Alternative approach to Budgeting
(Solved)
Describe two methods of Alternative approach to Budgeting
Date posted: October 12, 2021. Answers (1)
- Organisation required for the preparation of a master budget
(Solved)
Organisation required for the preparation of a master budget
Date posted: October 12, 2021. Answers (1)
- Describe the Contingency theory of budgetary control(Solved)
Describe the Contingency theory of budgetary control
Date posted: October 12, 2021. Answers (1)
- Describe the two Budgetary Styles(Solved)
Describe the two Budgetary Styles
Date posted: October 12, 2021. Answers (1)
- How does human behaviour affect budgetary control?(Solved)
How does human behaviour affect budgetary control?
Date posted: October 12, 2021. Answers (1)
- Uses of budgetary control(Solved)
Uses of budgetary control
Date posted: October 12, 2021. Answers (1)
- Discuss two types of control system in management accounting(Solved)
Discuss two types of control system in management accounting
Date posted: October 12, 2021. Answers (1)
- Classification of Overheads(Solved)
Classification of Overheads
Date posted: October 12, 2021. Answers (1)
- Aims of Absorption costing(Solved)
Aims of Absorption costing
Date posted: October 12, 2021. Answers (1)
- Discuss Overhead Absorption and its illustration(Solved)
Discuss Overhead Absorption and its illustration
Date posted: October 12, 2021. Answers (1)
- Describe Traditional Absorption Costing(Solved)
Describe Traditional Absorption Costing
Date posted: October 12, 2021. Answers (1)