What is an accounting? What do you mean by accounting? You will exactly learn! what is the accounting? So Welcome to the “Accounting” Accounting is an arrangement of recording, identifying, summarizing, analyzing all the financial transactions for the enterprises in the books of accounts. For a business, it needs to know what is going on the financial area. easy accounting software is a basic protocol under which business is keeping all the business record systematically. So the basic question everyone wants to know and learn, What's the difference between the financial accounting and management accounting? So each term has carried their different meaning. Before discussing the terms it should be noted that Accounting can be categorized in two ways financial accounting and management accounting. This both accounting are the part of the Business accounting. Business accounting keeps track of all the records of financial accounting and management accounting. There is the number of difference between the financial accounting and management accounting. So let us discuss the term FINANCIAL ACCOUNTING AND MANAGEMENT ACCOUNTING in Brief:- 1. FINANCIAL ACCOUNTING:- Financial accounting is an arrangement of recording, summarizing and reporting the company's financial transactions. It presents the financial health of the company and it generally focuses on the outside users like shareholders, investors and other people outside of the organization with informative information. 2. MANAGEMENT ACCOUNTING:- Management accounting is used to managed and take decisions regarding the daily operations of the enterprises. It is managed by the members who work within the organizations like managers, directors and other people inside the organization. Financial accounting VS management accounting:- 1. The one and basic difference between these two terms are that financial accounting primary focus on the externals users of the company and management accounting is generally focused on the internal users of the company. 2. Management accounting does not require law while financial accounting is required by law. 3. Financial accounting based on delayed, historical data while management accounting is timely,future-oriented. 4. Financial accounting can focus and cover the entire organizations on the business while management accounting only focuses on the specific areas. 5. The Financial accounting must follow GAAP/IFRS and prescribed format but management accounting not have any prescribed format. The importance of accounting: Proper accounting is important for any of the firm for success. In today's complex and dynamic business environment online accounting software is the best way to keep a systematic record of the enterprises. For the businessman, it is important to know the importance of Cloud-based accounting in business. Approachable accounting in business is effective, easy, breezy and simple. For business owners, its aim is to grow and run their business successfully. It is important to know where there is money coming from and where is going out. Accounting helps in planning, controlling and decision-making process. Key points why accounting is important in the business organization:- 1. Helps to create a planning budget of the enterprises. 2. Helps to maintain the proper record of asset and liabilities of the firm. 3. Helps to evaluate and analyze the performance of the firm 4. Helps in decision making. 5. Helps in managing and monitoring cash flow. 6. Helps to provide information to the external and internal users. CONCLUSION: Accounting is the most common tools and technique which is important in every firm for their success and growth of the firm of long life. There's any difference between the financial and management accounting but both the tools are great and helpful for the firm to run the business well. Financial accounting is mandatory because every company legally wants to disclose the correct and true pieces of information to their potential investors. On the other hand, management accounting is mandatory to take all the decisions regarding management right. Both terms carry their own importance in business.
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