Financial accounting and managerial accounting are the two major parts of accounting principles.
Managerial accounting is the method of selecting, calculating, analyzing, interpreting, and communicating financial data to authorities to achieve the organization’s goals.
Financial accounting is the method of recording, summarizing, and reporting the list of transactions and financial activities from business operations over a period of time to the public or regulators.
Main usage of managerial accounting is to help users to take wise business decisions.
Main Goal of Both Accounting Practices
The main goal of managerial accounting is to develop useful data for a organization’s internal use. Business managers collect data that includes strategic planning, assist them set realistic goals, and encourages an efficient directing of company resources.
The data produced through financial accounting is completely historical; financial accounting contain data for a predefined period of time. Managerial accounting search for previous performance and develop business forecasts.