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Accounting For Managers - Cost Estimation And Control-Cost Accounting

Distinction Between Financial Accounting And Cost Accounting

   Posted On :  03.05.2018 10:46 pm

Though there is much common ground between financial accounting and cost accounting and though in fact cost accounting is an outgrowth of financial accounting yet the emphasis differs.

Distinction Between Financial Accounting And Cost Accounting
 
Though there is much common ground between financial accounting and cost accounting and though in fact cost accounting is an outgrowth of financial accounting yet the emphasis differs. Firstly financial accounting is more attached with reporting the results of business to persons other than internal management – government, creditors, investors, researchers, etc. Cost accounting is an internal reporting system for an organisation’s own management for decision making. Secondly financial accounting data is historical in nature and its periodicity of reporting is much wider. Cost accounting is more concerned with short-term planning and its reporting period much lesser than financial accounting. It not only deals with historic data but also is futuristic in approach. Thirdly, in financial accounting the major emphasis in cost classification is based on the type of transaction e.g. Salaries, repairs, insurance, stores, etc. But in cost accounting the major emphasis is on functions, activities, products, processes and on internal planning and control and information needs of the organisation.

 

Tags : Accounting For Managers - Cost Estimation And Control-Cost Accounting
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