Financial accounting is specific to historical financial information to external users of information like the shareholders, creditors, stockbrokers, investors and including bankers and however such information is required to follow GAAP principles to maintain consistency, Heisinger, K., & Hoyle, J. B.(2012). Managerial accounting focuses on financial and nonfinancial information for internal users of the organization for decision making process and its users are managers, sales staff, purchasing officers and executives. One of the key characteristic of managerial accounting is making projections on futures projects for instance if the company is to introduce a new product, it should be accompanied with projected cashflow statement, and it …show more content…
Nonmanufacturing cost relates to selling or administrative costs. The cost of goods sold represent an expenses account under the income statement or statement of comprehensive income and it represents all the cost of goods sold for a period, Heisinger, K., & Hoyle, J. B. (2012). Cost of goods sold Product costs Period cost An expenses account Cost expensed when goods are sold Costs are expensed during the time incurred Job costing records revenue and costs for one activity in order to produce a distinctive product whilst process costing records revenue and costs for batches of similar items of products. However, the mechanism is service industry and manufacturing are equally the same, except on material difference as on service industry they are fewer, and service industry they do not use work-in-process account but instead the costs are charged to the expenses account, Heisinger, K., & Hoyle, J. B.