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Accounting For Managers - Cost Estimation And Control-Cost Accounting

Introduction and Learning Objectives of Cost Accounting

   Posted On :  03.05.2018 10:41 pm

Accounting can no longer be considered a mere language of business.

Introduction

 
 
Accounting can no longer be considered a mere language of business. The need for maintaining the financial chastity of business operations, ensuring the reliability of recorded experience resulting from these operations and conducting a frank appraisal of such experiences has made accounting a prime activity along with such other activities as marketing, production and finance. Accounting may be broadly classified into two categories – accounting which is meant to serve all parties external to the operating responsibility of the firms and the accounting, which is designed to serve internal parties to take care of the operational needs of the firm. The first category, which is conventionally referred to as “financial accounting”, looks to the interest of those who have primarily a financial stake in the organisation’s affairs – creditors, investors, employees etc. On the other hand, the second category of accounting is primarily concerned with providing information relating to the conduct of the various aspects of a business like cost or profit associated with some portions of business operations to the internal parties viz., management. This category of accounting is divided into “management accounting” and “cost accounting”. This section deals with cost accounting.
 

Learning Objectives

 
 
After reading this lesson, the reader should be able to:
 
 
ՖՖ                    understand the different dimensions of cost accounting.
 
ՖՖ                    distinguish cost accounting from financial accounting.
 
ՖՖ                    appreciate the utility of cost accounting.
 
ՖՖ                    apply the various bases of classification of costs.
 
ՖՖ                    prepare a cost sheet or tender or quotations.

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