Accounting can no longer be considered a mere language of business.
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.
After reading this lesson, the reader should be able to:
understand the different dimensions of cost
distinguish cost accounting from financial
appreciate the utility of cost accounting.
apply the various bases of classification of costs.
prepare a cost sheet or tender or quotations.
Tags : Accounting For Managers - Cost Estimation And Control-Cost Accounting
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