14. Introduction to Financial and Management Accounting
The chapter covers essential concepts of Financial and Management Accounting, highlighting their importance in modern business environments. It delineates between the two accounting branches and discusses their purposes, tools, and legal implications. Understanding these principles is crucial for professionals across various sectors, especially in IT and engineering, facilitating better decision-making and strategic planning.
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Sections
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What we have learnt
- Accounting is a systematic process aimed at providing financial information for decision-making.
- Financial Accounting focuses on external reporting, while Management Accounting aids internal decision-making.
- Technological advancements play a significant role in modern accounting practices, enhancing efficiency and accuracy.
Key Concepts
- -- Financial Accounting
- A branch of accounting that records and reports financial transactions primarily for external users, adhering to standardized rules.
- -- Management Accounting
- A type of accounting that supports internal management through analysis and decision-making tools.
- -- Going Concern
- An accounting principle that assumes a business will continue to operate indefinitely.
- -- Accrual Concept
- The principle that income and expenses should be recognized when they are incurred, regardless of when cash transactions occur.
- -- Cash Flow Statement
- A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.
Additional Learning Materials
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