Sophia Tutorial Accounting in Practice,

1. Managerial vs. Financial Accounting Managerial accounting is a branch of accounting that is focused on internal reporting to assist internal management with decisions, structure, and goals. Financial accounting accounting, on the other hand, is a branch of accounting that is focused on external reporting of financial status to provide information to decision makers and interested parties. Now, what is the common thread between managerial and financial accounting? Well, they both provide information to decision makers; therefore, they play an important role in decision-making. Managerial accounting plays a role in internal decision-making, while financial accounting plays a role in external decisionmaking.  TERMS TO KNOW Managerial Accounting A branch of accounting focused on internal reporting to assist internal management with decisions, structure, and goals Financial Accounting A branch of accounting focused on external reporting of financial status to provide information to decision © 2019