When it comes to managerial accounting it entails preparing accounting reports for the management that will offer accurate and update financial at the same time statistical information that are normally required by the management. On its part, financial accounting makes annual reports that are majorly used by external stakeholders of the organization. In that way one can say management accounting is used to generate periodical reports that can be monthly or weekly that are utilized by the internal audience for instance the chief executive officer, company directors among others. Therefore the reports will contain aspects such as amount of cash available, the sales revenues that have been generated among other elements (Hemmer & Labro, 2008).
There are a number of differences though there are some similarities between financial and managerial accounting. In terms of aggregation financial accounting deals with results of the whole business while managerial will deal with more detailed accounting such as profit by product. On efficiency financial accounting shows the profitability of the firm and managerial will show what is specifically bringing issues and how to solve the same. On the side of proven information financial accounting requires keeping of records with considerable precision unlike the former that deals with estimates. Other differences include the time period ere financial accounting deals with the financial outcomes for a firm that is what it has already achieved which is historical orientation, while managerial can deal with budgets and forecast making it more future oriented
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Turning on to the similarity between the two, they try to quantify the financial activities of a firm and its transactions. Both of them utilize financial statements, the revenues, expenses, the assets, liabilities of a firm and the cash flows. They all form part of total accounting data and the accounting information that is used in accounting to make reports and analysis. They also have similarities on determination and measurements of the costs. They are both important a business as they can provide both future and historical perspective of a business as explained above. If given a choice I would like to pursue managerial accounting since more specific items of an organization and offers solutions to what is ailing the firm (Hemmer & Labro, 2008).
Normally, variable costs are the ones which changes depending on the level of activity of a business. Fixed costs does not changes irrespective of the levels of activity of a firm such has rent of a business while Mixed costs has both variable and fixed characteristics. On the issue of job order costing is a way of assigning the manufacturing costs of a firm to individual goods or the batches of the produced products. For instance, a bottling firm can assign the costs associated to say produced 500 crate of mineral water which represent a batch. Apart from a bottling firm job order costing can be used in a brewing firm the know the cost associated with a particular pack of beer (Correia & Saldanha-da-Gama, 2014) .
References
Correia, I. & Saldanha-da-Gama, F. (2014). The impact of fixed and variable costs in a multi-skill project scheduling problem: An empirical study. Computers & Industrial Engineering, 72, 230-238.
Hemmer, T. & Labro, E. (2008). On the Optimal Relation between the Properties of Managerial and Financial Reporting Systems. Journal of Accounting Research .
