· What is financial accounting? How does it differ from managerial accounting?
Financial accounting reports disclosed external users' historical information (shareholders and creditors) used. Accountants have to follow the U.S. Generally Accepted Accounting Principles (GAAP) and do not have to be comprehensive. In contrast to financial accounting, GAAP does not have to be implemented, and data will be detailed with managerial accounting. Managerial accountings' focal point is internal users for managers and positions who are responsible for analyzing the organization's accounting information. Information divulges in managerial accounting are for future planning (Characteristics of Managerial Accounting, n.d.). Managerial accounting reports measure the organization's input and output activities that can be used to analyze and plan. The constant rise in health care is affected by the population and demographic shift, and also improved medical technology is a factor that is considered in managerial accounting reports. Some important decisions, such as resource allocation and an organization's effectiveness, are what managerial accounting can impact (Chapman et al., 2016).
Characteristics of Managerial Accounting. (n.d.) Retrieved March 29, 2022, from
Chapman, C., Kern, A., Laguecir, A., & Quentin, W. (2016). Management accounting and efficiency in health services: the foundational role of cost analysis. Health System Efficiency, 46 (4). Available from:
The difference between net income and cash flow is net income is the profit that the company made from a period of time. Cash Flow is monitoring the company's cash coming in and out on a day to day basis. The financial statement for cash flow has two types. The two types examines either a given period of time or projection for the future. According to the text from Small Business Management in the 21st century, "The historic cash-flow statement is similar to the income statement in that it looks at cash inflows and cash outflows for a business during a specified period of time. Like the income statement, these periods of time can be the fiscal year, the fiscal quarter, or a month. The cash-flow projections statement attempts to identify cash flows into a firm and cash flows from a firm for some future period. This projection is extremely important because it may identify future subperiods in which a firm is producing a negative cash flow—where cash outflows exceed cash inflows." The financial statement for net income is a financial statement showing a profit for the period of time. The financial statement shows all revenues and expenses, and subtracts the expenses from the revenue to show net income for the period.
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