Analyzing Financial Statements for Planning and Cost

Additional Information: Eddison Electronic Company (EEC) provides electricity for several states in the United States. You have been employed as a cost accountant at this organization. You have recently hired Susan Thompson, who has experience with financial accounting. Financial accounting includes preparing journal entries that provide a record of the day-to-day activities of the company and preparing financial statements, such as an income statement, a statement of owners’ equity balance sheet, and a cash flow statement. Although Susan has experience with and fully understands financial accounting, she has no experience with managerial accounting.

With your fellow classmates, please discuss what Susan should know about managerial accounting.

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Explain the similarities and differences between financial and managerial accounting.
Provide examples of the reports used for financial reporting and how those reports differ from managerial accounting reports.
Determine how managers might use accounting information for planning and controlling purposes.

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