Final answer:
Financial accounting focuses on providing financial information to external stakeholders, while management accounting provides information for internal decision-making.
Step-by-step explanation:
Financial Accounting: Financial accounting focuses on recording, summarizing, and reporting financial transactions of a company. It provides information to external stakeholders like investors, creditors, and regulatory authorities.
The primary goal of financial accounting is to provide accurate and reliable financial statements, such as the balance sheet, income statement, and cash flow statement, that reflect the financial position and performance of a company.
Management Accounting: Management accounting, on the other hand, is concerned with providing information to internal stakeholders, such as managers and decision-makers within the organization.
It involves analyzing and interpreting financial information to help with planning, controlling, and decision-making. Management accounting focuses on providing detailed reports and analysis on costs, budgets, and performance indicators to help managers make informed decisions in achieving organizational goals.
Overall, while financial accounting provides information to external stakeholders for compliance and investment decisions, management accounting supports internal decision-making and provides information for planning, monitoring, and controlling the operations of the organization.