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Subject: Cost Accounting
The differences: What do they help us determine
? Financial accounting helps to arrive at the financial reports which consists of income statements, balance sheet, cash flows, etc. through it the evaluation and prediction is possible. On the contrary, through the help of cost accounting it becomes easy to allocate costs and hence the control of cost can be easily done.
Who does it help?
Financial accounting helps the internal as well as external parties. The parties such as investors, government, media needs to know about the performance, which can be known by the financial reports such as income statements, balance sheet etc. Cost accounting helps the internal management to determine the extent of control so that there is proper allocation of cost and cost control.
How does it classify things?
In cost accounting the classification is done on the basis of man, material and direct as well as indirect expenses. The elements of cost, profit and price is generated. Financial accounting classifies things on the basis of financial information and records which is generated. Only the monetary aspects are recorded and taken into consideration while the non-monetary aspects are ignored.
When is it presented?
Financial accounting is done annually to determine the profit or loss on the other hand cost accounting is done periodically to know the cost information.