Financial accounting provides information to decision makers who are not involved in the day-to-day operations of an organization. These external decision makers include investors, creditors, and others. The information is distributed primarily through general-purpose financial statements. Financial statements describe the condition of the organization and the events that happened during the year.
Managerial accounting involves providing information to an organization's managers. Managerial accounting reports often include much of the same information used in financial accounting. However, managerial accounting reports also include a great deal of information that is not reported outside of the company.
Financial Accounting Managerial Accounting.
Preparing financial statements General accounting .
Auditing financial statements Cost accounting .
Budgeting .
Internal auditing .
The purpose of the balance sheet is to provide information that helps users understand a company's financial status as of a given date. As a result, the balance sheet often is called the statement of financial position. The balance sheet describes financial position by listing the types and amounts of assets, liabilities, and owner's equity of the business.
The income statement shows whether the business earned a profit. It does not simply report the amount of net income or net loss. Instead, it lists the types and amounts of the revenues and expenses.
The statement of cash flows describes where a company's cash came from and where it went during the period. This statement also shows how much cash was on hand at the beginning of the period, and how much was left at the end.