Final answer:
Managerial accounting focuses on internal business information for management, while financial accounting provides standardized financial information to external entities.
Step-by-step explanation:
Managerial accounting deals with information inside the firm, whereas financial accounting provides information outside the firm. Managerial accounting is primarily used by a company's internal management team and is not required to follow any standard set of rules, like Generally Accepted Accounting Principles (GAAP). Instead, it focuses on internal reports and information that help management make strategic business decisions. On the other hand, financial accounting is designed to provide information in the form of financial statements—balance sheets, income statements, and cash flow statements—that reflect the business's financial performance and position to external parties such as investors, creditors, regulators, and tax authorities. Financial accounting must comply with GAAP or International Financial Reporting Standards (IFRS) to ensure accuracy and consistency.