What is the focus of financial accounting compared to management accounting?

Financial accounting primarily focuses on the overall performance and financial position of the entire organization. It provides a comprehensive view of the company's financial status through standardized financial statements such as balance sheets, income statements, and cash flow statements. These statements are essential for external stakeholders, including investors, creditors, and regulators, who need to assess the organization’s financial health and performance over a specific period.

In contrast, management accounting is more concerned with the internal aspects of the organization, emphasizing specific segments, products, and departments to aid in decision-making, planning, and control. While financial accounting looks outward and provides a summary view of the organization, management accounting drills down into details that are more actionable for internal management purposes.

Given this distinction, the correct choice emphasizes the holistic view that financial accounting provides for the organization as a whole.