5.4: Why It Matters- Managerial Accounting in Business
Why learn about managerial accounting?
There are many differences between financial accounting and managerial accounting. Financial accounting is a requirement, in order to have the information available to prepare tax returns, and financial statements. Outside investors, banks and regulatory agencies need historical information to provide funding and to impose taxes.
Managerial accounting on the other hand is not a regulatory requirement, but it is a requirement for a business to plan and make good decisions. Without managerial accounting, it may be difficult for a business to show a profit, create effective pricing and cost models and overall, be a business that can last.