Question

1. Will you utilize managerial accounting in your personal and professional life and how? Give examples.

2. Will you utilize financial accounting in your personal and professional life and how? Give examples.

Answer 1

1) MANAGERIAL ACCOUNTING- It is the process of identifying, measuring analyzing, interpreting and communicating information to the managers. After getting the information managers will take a decision for the organization to achieve its goal based upon the information given.

Managerial accounting will be used in personal and professional life.

For example In personal life, if you want to buy a car, you will collect all the information regarding car like model, mileage, seating capacity, engine, company, post service etc. After considering all these information you will take a decision to buy a particular car.

In professional life, for a business to sustain, managerial accounting is used in forecasting and analyzing the trends of the business. it helps the company to forecast the business and take necessary decisions to sustain in future.

2) FINANCIAL ACCOUNTING- it is a process of recording, summarizing and reporting the transactions from business operations over a period or time. These transactions are summarized in the preparation of financial statements like income statement, balance sheet, cash flow statement etc.

Financial accounting will be used in personal and professional life.

For example In personal life, to achieve the personal economic satisfaction people will record their incomes, savings, and the expenses incurred for a particular period of time. People will maintain a book and record all transactions that had happened. By applying financial accounting you will get the detailed report of the transactions and also can avoid unnecessary expenses that had happened earlier.

In professional life, Every shareholder will analyse the financial statements of the company and then invests in that company. so, in order to get the investment for the company it should prepare financial statements.

Thank you