Financial and ManagementAccountingExternal UsersIntemal Users
Financial accounting provides informationto managers and people outside the firm- Financial accounting information must meetcertain standards of relevance and reliabilityManagementaccounting generatesconfidential information for internaldecision makers, e.g.,-Topexecutives- Department heads
Financial accounting provides information to managers and people outside the firm – Financial accounting information must meet certain standards of relevance and reliability Management accounting generates confidential information for internal decision makers, e.g., – Top executives – Department heads
TheFlowof AccountingInformationPeople make decisions;Business transactions occur;Businesses prepare reports to show theresults of their operations
The Flow of Accounting Information People make decisions; Business transactions occur; Businesses prepare reports to show the results of their operations
The Flow of AccountingInformation1.Peoplemake decisions2.Business transactions occur3. Businesses preparereports to showthe results of their operati ons