Q:

How would you define "managerial accounting"?

A:

Quick Answer

Managerial accounting is the process of identifying, measuring, analyzing and communicating specific information to pursue a company’s goals. This process is also sometimes known as cost accounting.

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Full Answer

There are several main differences between managerial accounting and financial accounting. Managerial accounting is used to provide information to people within the organization or company, while financial accounting is mainly for people outside of it, such as shareholders. In managerial accounting, reports are created for future outlooks, whereas financial accounting reports focus on reporting requirements of profitability, liquidity, solvency and stability. Financial accounting is also required by law for businesses, while managerial accounting is not.

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