Assignment 1 Essay Example | Topics and Well Written Essays - 2500 words - 3

Assignment 1 - Essay Example The information obtained from management accounting system help facilitate this objective. For example the management of an organization can use management information to determine which products to drop outsource or produce in house. The information used in planning can then be used as standards against which future performance can be evaluated. This then forms a basis for controlling output or inputs ad determined from the variance. In management accounting, the decision maker is able to forecast an activity and the required input, such as labour time and cost for production, which helps in planning to determine the feasibility of the project. During actual production, he costs incurred are used to evaluated performance and determine the necessary course of action through control mechanism (Needles, Crosson, & Powers, 2002). Management accounting information is also used in decision making is to; generate information that is useful in helping the management allocate costs between costs of goods sold and inventory for internal and report profit to external users Financial accounting is a term used to describe the process of maintains a system of accounting records such as revenues, and exoenses for business transactions and other items of financial nature and reporting the financial position and fianacial performance of an entity. The main purpose of financial accounting is to provide information to external users such as investors, banks and shareholder (Needles, Crosson, & Powers, 2002). The scope of financial accounting concretes on the external users of financial information of the company. Therefore accounting information is useful in acquisition of financial resources from lenders banks and other financial institutions that depend on such information to make decisions. From a company’s financial information a bank is able to determine the ability of a firm to pay interest on bonds. Financial accounting