Built along the fundamental equation: Assets = Liabilities + Owner’s Equity

Accounting information is prepared in accordance with generally accepted accounting principles.

Reports are mandatory

It deals with the monetary and nonmonetary information

Includes current figures, and estimates or plans for the future

Timeliness and relevance of information are more important rather than precision

Reports tend to be much more extensive and detailed for better analysis and control

Information is drawn heavily from the company’s accounting system

Its purpose is to produce financial statements

The main focus is on segments, products, divisions, departments and other responsibility

Reports are primarily prepared for external users

Reports are prepared as they are needed by the management

Information is drawn heavily from the company’s accounting system

It records the financial history of an enterprise