Managerial Accounting

Dr. Kinslin D.
Assignment 1

Salem Al Mansoori
4163-3137
Answer 1:

a)

The difference between financial accounting and management accounting:

Financial accounting focuses on the external uses of accounting information, while administrative
accounting focuses on internal uses.
Financial accounting records financial transactions related to the economic unit that actually
occurred, i.e., historical, while administrative accounting focuses more on the future and relies on
historical data to predict.
Financial accounting is committed to accounting principles generally recognized in the preparation
of financial statements. Management accounting does not have accepted principles but adheres to
the principles and rules established by the Department of Economic Unity even if they do not
conform to accepted accounting principles.
Financial accounting focuses on objectivity and the viability of accounting information for
verification and review, while management accounting focuses on the appropriateness of
accounting information for decision-making and flexibility.
Financial accounting focuses on the accuracy of accounting information, while administrative
accounting focuses on speed in providing information and often management may sacrifice
accurate information in order to obtain it quickly.
Financial accounting focuses on financial transactions of the economic unit as a whole, while
administrative accounting deals with the activities of the internal departments of the economic
unit.

b)

The planning and decision-making function consists of three steps:

Defining long-term and short-term objectives by senior management.
Develop strategic plans that represent the general guidelines that determine senior management
does the future path of the organization and this as well.

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Tactical plans are developed and managed by the directors of the executive (central)
administration. The decision-making process falls within these three stages.
Management accounting seeks to achieve a set of objectives:
To provide appropriate assistance to managers in establishments by providing them with the
appropriate tools to apply accounting and financial evaluation, which contributes to the follow-up
of administrative performance in a detailed and total time.
The implementation of a deep foundation in data analysis, according to the application of
appropriate methodologies rely on the integration of management science tools and accounting.
Contribute to building a forward-looking approach to profit performance and private financial
achievement in the organization, in order to make appropriate recommendations to harmonize the
administrative process and special requirements in the future plan.
Examine the potential risks that affect the vitality and continuity of work, and then develop the
necessary models to overcome any potential financial or administrative damage, both now and in
the future.
Participation in the development of financial budgets: Because the budgets of administrative
accounting covers all financial activities in the institution, and is characterized as realistic, which
can be implemented depending on the possibilities of the institution, and allow these budgets to be
adjusted in line with changes in circumstances affecting the state of the institution.

c)

Financial accounting examines potential risks to the continuity and vitality of the business and
develops the necessary adaptive frameworks to avoid any possible administrative or financial
shocks to current or future work based on the overall accounting and business analysis.
Budgets that are prepared by management accounting not only cover all aspects of the financial
activity of the institution, but also characterized by realism, so that they can be implemented
according to the possibilities and conditions of the institution available to them, and to fit also with
the objectives of the institution. These budgets are also characterized by the participation of a large
number of employees at all levels of management at the institution in their design to take advantage
of their expertise and stimulate their innovation and the promotion of belonging to the workplace.

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In addition, the budgets can be modified in accordance with the expected changes in the conditions
and in order to be suitable continuously according to the changing conditions in the institution.
The budgets also vary in terms of period to suit all economic activities and sizes of the institutions
without obstacles.

d)

The similarities between cost accounting and financial accounting:

The double-entry rule is applied in establishing financial transactions in books and records in both
the cost accounting and financial accounting system.
Both accounting cost and financial accounting a subsystem of accounting information has a set of
inputs and a set of outputs and is based on the principle of periodic reporting and financial results.
Cost accounting is an integral part of financial accounting as it provides detailed data. When
preparing final accounts, cost accounting provides the cost of commodity inventory, total
production costs, under-operating production and depreciation of fixed assets. Financial
accounting other data related to assets and liabilities are prepared in preparation for the final
accounts and final accounts. In the balance sheet under the current assets item, there is a last-term
commodity inventory. This section calculates cost accounting.
Differences between cost accounting and financial accounting:
There are many differences between cost accounting and financial accounting, the most important
of which are the following:
In terms of users of accounting information: Financial accounting is concerned with the provision
and provision of accounting information to external parties such as investors, creditors, trade
unions, etc., while accounting for costs by providing costs and accounting information to the
administrative levels of the facility.
Objectives: Financial accounting aims to provide data on the results of the activity, financial
position and cash flows of the entity while cost accounting is concerned with providing cost
information to internal parties such as management.

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Data type: Financial accounting relies heavily on historical financial statements, while cost
accounting relies on historical financial data, protection and data that can be inferred from future
projections.
Type of reports: The financial accounting report is presented in a comprehensive manner, relying
on the accounting principles, policies and standards commonly used in the preparation of such
reports. Cost accounting reports are analytical reports based on the management needs of data and
information on costs of production units.
Compulsory level: Financial accounting is mandatory by virtue of legislation and accounting
policies, while cost accounting is optional according to management requirements of accounting
data and information.

Answer 2:

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References:

Joannidès de Lautour V. (2018) Accounting for What Counts in the Value Chain in a Way That
Counts. In: Strategic Management Accounting, Volume I. Palgrave Macmillan, Cham.
Mitev N., Morgan-Thomas A., Lorino P., de Vaujany FX., Nama Y. (2018) Managerial
Techniques in Management and Organization Studies: Theoretical Perspectives on Managerial
Artefacts. In: Mitev N., Morgan-Thomas A., Lorino P., de Vaujany FX., Nama Y. (eds) Materiality
and Managerial Techniques. Technology, Work and Globalization. Palgrave Macmillan, Cham.
Spreafico M.R.M. (2018) Is the Share of Income of the Top One Per cent Due to the Marginal
Product of Labour or Managerial Power?. In: Arestis P. (eds) Alternative Approaches in
Macroeconomics. Palgrave Macmillan, Cham.

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