Definition:
- Accounting system includes
- Accounting entity: The organization for which financial data are to be collected.
Financial Accounting vs Managerial Accounting:
| FA | MA |
|---|
| For | Outsider, public (lender, creditors, stockholders) | Internal Manager (Chief officers) |
| To be used | External and internal | Internal only for decision making |
| Concern | Accurate Corporation’s past transactions | Strategic and confidential information |
| Format | IAS, GAAP,… with 4 financial statements | No format or internal’s format, includes analysis |
| Legally required | Yes and audited | No |
| When | End of a period | whenever necessary to managers |
| How many accountant needed in the comp any | At least 1 | not necessary or depends on managers |
| Requirement | Accurate | Relevant |
| Time orientation | Historical, past transactions and financial events | Future, forcast, budgetings and projections |