Part 1
a)
Financial accounting is used to report the financial performance and position of a company to external stakeholders. On the other hand, managerial accounting is used to control the day-day to day operations of an organizations. In other words, the reports are used for internal purposes.
b)
The two types of accounting exists because they serve different purposes. Financial accounting is used by external stakeholders to make various decisions such as whether to invest in a company, whether to advance it a loan or whether to work for a given entity. Managerial accounting is used to monitor and control the operations of an entity. It allows for measuring deviations and taking timely corrective actions based on feedback.
c)
Users of financial accounting reports are external stakeholders. They include investors, potential investors, employees, debt providers, government and society. The users of managerial accounting reports are internal stakeholders. They include top management, middle level managers and departmental heads.
Part 2
a)
The decision problem is selecting a suitable flight that is not only relatively cheap but also takes the least time to ensure that I am able to catch the bus to my final destination.
b)
c)
A low cost flight will save me money that I can use for other purposes during the trip. Availability of internet access is important to keep in touch with my family and friends. The flight duration is not priority since all the flights will arrive on time.
d)
I would choose flight 2 because it is the cheapest flight with internet access. Besides, it has a first class upgrade if I need it. Therefore, I will save money but at the same time be able to communicate with family and friends.
