The Different Functions of Financial Accounting and...

Business requires the appropriation of funds and the analysis of how these funds are and should be used. The primary task of an accountant is to account for all transactions that were done over a period of time for a specific organization and to arrange these facts into financial statements that can be analyzed. The two main types of accounting, financial and managerial accounting are used to evaluate a businesses financial status through financial information that is specific to the audience. Although financial and managerial accounting use similar primary financial statements, the analysis of the documents and the information presented differs tremendously primarily because the financial accounting statements are directed to external†¦show more content†¦According to FASB, â€Å"The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law (Financial accounting standards, 2009).† This means that the amount that is e xpected to be taxed based on the depreciation schedule can be written off as an asset because the amount specified is not owed to the government because the item is depreciating faster than required to pay taxes on. Often times, this will cause income statement effects because the amount of tax liability and deferred tax will differ. For purposes of comparing financial and managerial accounting there is a tremendous effect on the two views. The other financial records are prepared to addresses internal control issues. In every business, the management team is constantly trying to increase the efficiency of their organization. To aid them in creating a plan, managers will request financial statements that are for managerial accounting purposes. Managerial accounting â€Å"is a field that provides economic and financial information for managers and other internal users (Weygandt, Kieso, Kimmel, 2008).† The financial statements that are prepared are concentrated to internal information that will be useful for management decision-making. The role of management is to make wise business decisions, which include planning, controlling, and directing; therefore, the main piece of information necessary to perform these tasks is cost. 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