CHAPTER 3
Management Accounting
Financial Accounting versus Management Accounting
Financial accounts are historic, and most of the information that is provided is financial in nature.
In contrast, management accounts are used to help management record, plan, and control the activities of a business and to assist in the decision-making and decision-taking processes. They can be prepared for any period of time such as daily, weekly, monthly, or yearly. Reports can be both forward looking or historic or a mix of both.
While there is no legal requirement to prepare management accounts, few businesses could expect to survive or thrive without them. Management accounts are prepared to meet the specific needs of the user and typically include both financial ...
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