Q2RQ. - Horngren'S Financial And Managerial Accounting

Question

Briefly describe the two major fields of accounting

Step-by-Step Solution

Answer

Financial accounting is the branch of accounting which exhibits financial information to the external decision makers. 

Managerial accounting is the branch of accounting which exhibits financial information to the internal decision makers.

Step 1: Explanation on Financial Accounting

Financial accounting is focused on providing information to the external stakeholders of the business such as creditors, taxing authorities, lending institutions, investors, etc. 

Step 2: Explanation on Managerial Accounting

Managerial accounting is focused on providing information to the internal management of the business, who are responsible for decision making in the business.