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What is Cost Accounting and Diferences

What is Cost Accounting and Diferences

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Published by: kasuntop99838 on Aug 14, 2009
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What is Cost Accounting?
Cost accounting is an approach to evaluating the overall costs that are associated with conducting business. Generally based on standard accounting practices, cost accounting is one of the toolsthat managers utilize to determine what type and how much expenses is involved withmaintaining the current business model. At the same time, the principles of cost accounting canalso be utilized to project changes to these costs in the event that specific changes areimplemented.When it comes to measuring how wisely company resources are being utilized, cost accountinghelps to provide the data relevant to the current situation. By identifying production costs andfurther defining the cost of production by three or more successive business cycles, it is possibleto note any trends that indicate a rise in production costs without any appreciable changes or increase in production of goods and services. By using this approach, it is possible to identify thereason for the change, and take steps to contain the situation before bottom line profits areimpacted to a greater degree.Product development and marketing strategies are also informed by the utilization of costaccounting. In terms of product development, it is possible to determine if a new product can be produced at a reasonable price, considering the cost of raw materials and the labor andequipment necessary to product a finished product. At the same time, marketing protocols canmake use of cost accounting to project if the product will sell enough units to make production aviable option.Cost accounting is helpful in making a number of business decisions. By weighing the actualcosts versus the anticipated benefit, cost accounting can help a company to avoid launching a product with no real market, prevent the purchase of unnecessary goods and services, or alter thecurrent operational model in a manner that will decrease efficiency. Whether utilized to evaluatethe status of a department within the company or as a tool to project the feasibility of openingnew locations or closing older ones, cost accounting can provide important data that may impactthe final decision.
Cost Accounting
What Does
Cost Accounting 
A type of accounting process that aims to capture a company's costs of production by assessingthe input costs of each step of production as well as fixed costs such as depreciation of capitalequipment. Cost accounting will first measure and record these costs individually, then compareinput results to output or actual results to aid company management in measuring financial performance.
Investopedia explains
Cost Accounting 
While cost accounting is often used within a company to aid in decision making, financialaccounting is what the outside investor community typically sees. Financial accounting is adifferent representation of costs and financial performance that includes a company's assets andliabilities. Cost accounting can be most beneficial as a tool for management in budgeting and insetting up cost control programs, which can improve net margins for the company in the future.
1. What is the difference between costaccounting and financial accounting 2. Whatis the different between cost accounting and
management accounting?
 Cost accounting and managerial accounting are really the same thing.The key difference between managerial/cost and financial accounting is that managerialaccounting information is aimed at helping managers within the organization make decisions. Incontrast, financial accounting is aimed at providing information to parties outside theorganization.cost is the amount of the expenditure. In cost accounting we can find cost of goods and services.financial accouts shows the profit and loss and balance sheet made during an accounting period,and also financial position of the business as on a particular date.cost accouting provides the management detailed information regarding cost of each product,services etc.Cost Accounting focuses on the costs of production and inventory valuations. ManagementAccounting produces internal financial reports and analysis prepared in such a way to assistmanagers in making decisions (such as expense reduction, capital investment, etc.). FinancialAccounting produces financial reports in accordance with GAAP and legal guidelines and wouldgenerally be the format which is distributed externally for banks, investors, etc.
What is the difference between costaccounting management accounting andfinancial accounting?
 Financial accounting is just preparing of final accountsCost accounting is just analysis of financial accounting data for fixation total cost and price of  product and control on costManagement accounting is analysis of financial and cost accounting for management of businessor different plans and policies .

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