The Differences Between Financial Accounting And Management Accounting (2)

Financial AccountingThis course is compulsory on the MSc in Accounting, Organisations and Institutions. Financial accounting aims at finding out results of accounting year in the form of Profit and Loss Account and Balance Sheet. Cost Accounting aims at computing cost of production/service in a scientific manner and facilitate cost control and cost reduction. For understanding the financial position of a business firm, they should prepare ‘Balance Sheet’.

Financial accounting reports the results and position of business to government, creditors, investors, and external parties. In financial accounting, cost classification based on type of transactions, e.g. salaries, repairs, insurance, stores etc. Generally Accepted Accounting Principles refer to the standard framework of guidelines for financial accounting used in any given jurisdiction.

International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. The Financial Accounting Standards Boards Statements of Financial Accounting Concepts No. 1 states the objective of business financial reporting, which is to provide information that is useful for making business and economic decisions.

These standards may be the generally accepted accounting principles of a respective country, which are typically issued by a national standard setter, or International Financial Reporting Standards, which are issued by the International Accounting Standards Board. Generally Accepted Accounting Principles refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or Standard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing, and in the preparation of financial statements.

They are progressively replacing the many different national accounting rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable and relevant as per the users internal or external. Joe has two market-leading textbooks published with McGraw-Hill—Advanced Accounting (11th edition, 2012) and Essentials of Advanced Accounting (5th edition, 2012), both coauthored with Tom Schaefer of the University of Notre Dame and Tim Doupnik of the University of South Carolina.

Financial AccountingFinancial Accounting