Managerial accounting differs from financial accounting in several areas. Specify whether each of the following characteristics relates to managerial accounting or financial accounting.
a. Focused on the future
b. Reporting is based mainly on the company as a whole
c. Reports are prepared usually quarterly and annually
d. Information is verified by external auditors
e. Focused on the past
f. Main characteristic of data is that it must be relevant
g. Reports tend to be prepared for the parts of the organization rather than the whole organization
h. Primary users are internal (for example, company managers)
i. Governed by Generally Accepted Accounting Principles (GAAP)
j. Main characteristic of data is that it must be reliable and objective
k. Reports are prepared as needed
l. Not governed by legal requirements
m. Primary users are external (i.e., creditors, investors)

Financial and management accounting are important tools for a business, but they serve different purposes. A company uses accounting to determine future operational plans, to review previous results and to check current business functions. Management accounting and financial accounting have different audiences, since investors do not usually participate in the day-to-day operations of the company, but they are worried about their investment, while managers need information quickly to make daily business decisions.

Management accounting is presented internally, while financial accounting is used for external stakeholders. Although financial management is of great importance to current and potential investors, management accounting is necessary for managers to make current and future financial decisions. Financial accounting is accurate and should adhere to the Generally Accepted Accounting Principles (GAAP), but management accounting is often more like a guess or an estimate, since most managers do not have Time to analyze the exact numbers when a decision has to be made.