Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Differences between Financial Accounting and Cost and Management Accounting

  • We have already looked at the basics and definition of both:
  • Financial Accounting as well as
  • Cost and Management Accounting in the post here
  • Here we will looked at a summarised version between the two:
DifferenceManagement AccountingFinancial Accounting
Information is mainly produced forInternal use for example by managers in decision makingExternal use by various stakeholders e.g. shareholders and government
Purpose of informationTo aid decision making and managerial functions such as coordinating, planning etcTo record the financial performance of the entity in a given period and show its financial position
Legal requirementsNone material is prepared according to the needs of the entityReports must be produced at least once a year in most cases depending on applicable laws
Format to be followedDecided by managers according to their needsFormat and content is set by reporting standards such as IASes or IFRSs
Nature of information Both financial and non-financial information is in reportsUsually mostly just financial information except notes to financial statements
Time periodBoth historical and forward looking in natureUsually just historical e.g performance in past period(s)
  • Remember that management accounting includes cost accounting (costing)

To access more topics go the ZIMSEC Advanced Level Accounting page

To access more topics go to the Cambridge AS/A level page