The similarities between financial accounting and managerial accounting are evident because both are financially motivated, generate monetary statements, possess an explicit group of users and demand a detailed comprehension of accounting theory (Bettner, Williams, Haka & Carcello, 2014). Both offer beneficial fiscal information to potential creditors, lenders, and investors so that they can arrive at appropriate decisions relating to debt instruments, selling and buying equity. They also attempt to quantify the outcomes of business transactions and activity. Importantly, both systems form part of a complete information system, which is utilized in fiscal and management accounting to formulate analysis or reports required (Needles, Powers & Crosson, 2013).
Furthermore, both produce accounting reports for executives and managers to evaluate. For instance, some of the documents they generate include the balance sheet, revenue reports, sales volume, income statements, and accounts of cash flow that indicate the association between assets, revenues, profits, volume and costs (Nilsson & Stockenstrand, 2016). They also utilize the databases for organizing financial reports and statements under their systems. Financial and managerial accounting needs accounting training expertise since they are extensively accepted and recognized professional field. Therefore, students are required to complete training courses before they become specialized experts (Bettner, Williams, Haka & Carcello, 2014). Additionally, both systems are characterized by classifying and accumulating the accounting data for the organization of financial statements. Essentially, similar accounting concepts and principles are utilized in both financial and managerial accounting aiming to achieve cost allocation and cost accumulation (Nilsson & Stockenstrand, 2016).
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