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Financial accounting and management accounting are two distinctive branches of
accounting. Besides financial accounting which ensures financial reporting, management
accounting which provides internal business information is implemented to smoothly run the
operation of the company (Garrison, Noreen, & Brewer, 2015).
Management Accounting Information, and Cost Volume Profit (CVP) Analysis
Distinction in Between Financial Accounting and Management Accounting
Managerial accounting information is the internal business information that support in the
internal decision making of the organization (CIMA, 2017). Financial reporting information is the
financial position and performance information (Garrison, Noreen, & Brewer, 2015). The
distinction in between financial reporting information, and management reporting information are
pointed out below.
o Financial reporting information is historical information (historical financial transactions),
whereas management accounting information is forward looking information (budgets and
forecasts) (Langfield-Smith & Thorne, 2012).
o Financial reporting information serves the needs and interests of the external
stakeholders including tax authority, regulators, stockholders, lenders etc., whereas
management accounting infor...