Introduction to managerial accounting Essay Example | Topics and Well Written Essays - 500 words

Introduction to managerial accounting - Essay Example It creates precise reports that are focused on future, present and past, the management uses these reports in making educated decisions concerning the organization. Some of the reports produced are; Department reports, Sales forecasting, planning reports and Production reports. Financial accounting provides information to government agencies, suppliers, banks and shareholders who use it in making long term decisions for the organization, and they follow Generally Accepted Accounting Principles (GAAP). Reports created include; income statement, balance sheets, retained earnings summary and cash flow reports. Managerial accounting lays emphasis on decisions that affect the future, therefore planning is an important element of the manager’s job since managerial accounting is future based. Financial accounting basically provides past financial transaction summaries which may be used in planning to some extent, since the future is not always a reflection of past happenings. Many changes are taking place in economic and technological conditions therefore, manager’s planning must be based on what will happen rather than what really happened (Accounting for Management, 2012). Accounting information is used internally by employees and various managers who include; marketing managers and purchasing managers. Accurate accounting is important to individuals who make crucial business and financial decisions within the organization that affect the organization directly. Companies aiming at selling services and goods at prices that provide adequate returns to the owners should keep an adequate level of liquidity and profitability to continue operations. Accounting information is critical to organizations in conducting their daily activities such as; financing the company, investing in resources, managing employees, producing goods and marketing