1. The differences between managerial accounting and financial accounting are:
- Internal use vs. external use
- Management Estimates vs. Adherence to GAAP framework.
2. The types of reports that management accounting produces, which enable managers and internal stakeholders to make future financial decisions for the business, are:
- Cost reports
- Performance reports
- Budget variance reports
- Account receivable aging reports.
3. The types of reports that financial accounting produces, which enable external and internal stakeholders to make economic and investment decisions are:
- Income statement
- Cash flow statement
- Balance sheet.
Thus, financial accounting reports facilitate the board of directors, stockholders, potential investors, creditors, financial institutions, and other external stakeholders to make long-term economic decisions, and management accounting reports enable management to make short-term decisions.
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