Distinguish between managerial accounting and financial accounting.

Financial accounting reports are prepared for the use of external parties such as shareholders and creditors, whereas managerial accounting reports are prepared for managers inside the organization.

This contrast in basic orientation results in a number of major differences between financial and managerial accounting, even though both financial and managerial accounting often rely on the same underlying financial data. In addition to the to the differences in who the reports are prepared for, financial and managerial accounting also differ in their emphasis between the past and the future, in the type of data provided to users, and in several other ways

Managerial accounting uses accounting information to help make decisions inside a company.
Financial accounting uses accounting information to guide decision makers outside a company, such as investors and lenders.

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