Financial and Management Concepts/Traits

Question 1

Nature of data

Answer 1

Financial - monetary
Management - non-financial data, production quantities, employees, no of hours, machine capacity etc

Question 2

What is the objective of financial accounting?

Answer 2

Financial accounting records, classifies and analyses business transactions of monetary nature, periodical intervals, statements of profit or losses and is for external users

Question 3

What is the objective of management accounting?

Answer 3

Management accounting is developed and used for planning, control and management decision-making. It is for internal users

Question 4

Tailor made

Answer 4

Financial - standardised/uniform
Management - fit organisational needs

Question 5

Nature

Answer 5

Financial - Objective
Mangement - Subjective

Question 6

Legal

Answer 6

Financial - Obligatory
Management - Optional

Question 7

Emphasis

Answer 7

Financial - past and present
Management - future, forecast, planning

Question 8

Periodicity

Answer 8

Financial - Financial year
Management - Ad-hoc

Question 9

Precision/accuracy

Answer 9

Financial - Greater precision and accuracy
Management - Approximated figures

Question 10

Audit

Answer 10

Financial - Audited by legislation
Management - Not subject to audit

Question 11

Publications

Answer 11

Financial - Published
Management - Not published