In business operations, many transactions take place in just a single day. Keeping a memory of all that happened in an organization in one’s mind is challenging. Therefore, business accounting is implemented to keep a record of the day-to-day happenings of the business. There is also a need to keep an eye on the firm's production costs and keep them in control to avoid making losses.
The first post differentiates between managerial and financial accounting in an organization. Managerial accounting dwells much on how the business's operations take place, especially in the production costs regarding the maximum output. Besides, this accounting regulates the number of employees and wages paid to ensure maximum profits (Girsch-Bock, 2021). Financial accounting, on the other hand, deals with the recording of financial transactions of the firm. The records include a balance sheet, cash books, and ledgers. These books of account keep a track record of the receipt and expenditure of finances in the organization (Girsch-Bock, 2021). Even though financial accounting does not control the firm's monetary decisions, it is an essential tool of reference to understand the business' financial position, hence financial decision making.
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The second post elaborates more on several expenses present in firms. Precisely, the post discusses the wages received by the employees when they do not engage in productive activities (Hornbeck & Moretti, 2018). The paid breaks in the organization can be the cause of significant financial constraints. Employees take breaks like paid annual leave, maternity leave, holidays, anniversaries, and end-of-year parties. The more breaks and leaves are granted to the workers, the more the company pays for undone duties.
References
Hornbeck, R., & Moretti, E. (2018). Who benefits from productivity growth? Direct and indirect effects of local TFP growth on wages, rents, and inequality (No. w24661). National Bureau of Economic Research.
Girsch-Bock, M., 2021. Managerial Accounting vs. Financial Accounting: What's the Difference? . [online] The Blueprint. Available at: <https://www.fool.com/the-blueprint/managerial-accounting-vs-financial-accounting/> [Accessed 1 February 2021].
