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This question is about senior accountant skills.
What is the difference between financial and managerial accounting?
The difference between financial and managerial accounting is that financial accounting puts emphasis on an organization's external financial items, while managerial accounting focuses on an organization's internal accounting items.
Financial accounting sees accountants produce financial documents, like income statements, and balance sheets. These documents are then used by external parties, such as investors, and industry regulators. These financial documents provide a view of a company's performance over a specific period of time and give a sense of a company's overall financial health.
Managerial accounting is a practice where accountants create financial documents that are used internally within a company or organization. The documents might cover company resources, like raw materials, labor, or equipment. This is crucial for executive decision-making at organizations and companies.
Here are the key differences between financial and managerial accounting:
Financial accounting puts emphasis on an organization's external financial items
Managerial accounting focuses on an organization's internal accounting items
Financial accounting focuses on long-term financial strategies relating to an organization's growth and performance
Managerial accounting focuses on short-term growth strategies relating to the economic maintenance of an organization
Managerial accountants typically have higher paying salaries than financial accountants
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