POST GRAD ACCOUNTING

Back in the days when I was studying accounting in college, Los Angeles City College had Accounting 1 and Accounting 2, which were the regular accounting courses for accounting majors.

Now that I am going back to college, I found that College of Southern Nevada did not have these aforementioned accounting courses, but instead have Managerial Accounting and Financial Accounting for their regular accounting courses for accounting majors.

Puzzled, I went out on a search as to the difference between the two preceding (2) accounting courses.

Managerial Accounting is the accounting used inside an organization to be used only inside the organization.  Financial Accounting is the accounting used inside an organization to be used outside the organization.

MANAGERIAL <----- ACCOUNTING -----> FINANCIAL
      (CEO)          (BALANCE SHEET)           (IRS)

Both accounting methods use the same kind of financial statements, e.g., Balance Sheet, but presents it differently.  The former presents it for the benefit of the clerks and managers of the organization.  The latter presents it for the benefit of an outside organization, like a creditor or the IRS (Internal Revenue Service).

Knight in Business 4.10.2013