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Managerial accounting (also called management accounting) identifies financial information that helps managers run a company’s operations efficiently. Managerial accountants may analyze specific products, costs, or projects, and then provide this information to a company’s managers to enable them to make more informed judgements. Reports that managerial accountants provide to managers include cost analysis, constraint analysis, capital budgeting, trend forecasting, inventory analysis, and other types of product or project analysis, according to the industry in which the company operates. Managerial accounting is largely an internal system.

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Managerial accounting (also called management accounting) identifies financial information that helps managers run a company’s operations efficiently. Managerial accountants may analyze specific products, costs, or projects, and then provide this information to a company’s managers to enable them to make more informed judgements. Reports that managerial accountants provide to managers include cost analysis, constraint analysis, capital budgeting, trend forecasting, inventory analysis, and other types of product or project analysis, according to the industry in which the company operates. Managerial accounting is largely an internal system.
In most cases, accountants use generally accepted accounting principles (GAAP) when preparing financial statements in the U.S. GAAP is a set of standards and principles designed to improve the comparability and consistency of financial reporting across industries. Its standards are based on double-entry accounting, a method in which every accounting transaction is entered as both a debit and credit in two separate general ledger accounts that will roll up into the balance sheet and income statement.
By 1880, the modern profession of accounting was fully formed and recognized by the Institute of Chartered Accountants in England and Wales. This institute created many of the systems by which accountants practice today. The formation of the institute occurred in large part due to the Industrial Revolution. Merchants not only needed to track their records but sought to avoid bankruptcy as well.
Professional accounting bodies include the American Institute of Certified Public Accountants (AICPA) and the other 179 members of the International Federation of Accountants (IFAC),[44] including Institute of Chartered Accountants of Scotland (ICAS), Institute of Chartered Accountants of Pakistan (ICAP), CPA Australia, Institute of Chartered Accountants of India, Association of Chartered Certified Accountants (ACCA) and Institute of Chartered Accountants in England and Wales (ICAEW). Professional bodies for subfields of the accounting professions also exist, for example the Chartered Institute of Management Accountants (CIMA) in the UK and Institute of management accountants in the United States.[45] Many of these professional bodies offer education and training including qualification and administration for various accounting designations, such as certified public accountant (AICPA) and chartered accountant.[46][47]
Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Follow @DanCaplinger Follow @DanCaplinger
The history of accounting has been around almost as long as money itself. Accounting history dates back to ancient civilizations in Mesopotamia, Egypt and Babylon. For example, during the Roman Empire the government had detailed records of their finances. However, modern accounting as a profession has only been around since the early 19th century.
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