Financial accounting is best differentiated from managerial accounting by which of the following? Financial accounting is done on a cash basis and managerial accounting is done on an accrual basis. Managerial accounting serves users who are external to the firm; financial accounting serves users who are internal to the firm. Financial accounting serves users who are external to the firm; managerial accounting serves users who are internal to the firm. Financial accounting has no generally accepted principles, whereas managerial accounting has a strong set of generally accepted principles