Introduction to Cost

Accounting
1.

REPORTS PREPARED IN FINANCIAL

ACCOUNTING ARE IN GENERAL-PURPOSE
REPORTS, WHEREAS REPORTS PREPARED IN
MANAGERIAL ACCOUNTING ARE USUALLY
SPECIAL-PURPOSE REPORTS.
2.

MANAGERIAL ACCOUNTING INTERNAL

REPORTS ARE PREPARED MORE FREQUENTLY
THAN ARE CLASSIFIED FINANCIAL
STATEMENTS.
3.

DETERMINING THE UNIT COST OF

MANUFACTURING A PRODUCT IS AN OUTPUT
OF FINANCIAL ACCOUNTING.
4.

MANAGEMENT ACCOUNTING APPLIES TO ALL

FORMS OF BUSINESS ORGANIZATIONS.
5.

CONTROLLING IS THE PROCESS OF

DETERMINING WHETHER PLANNED GOALS
ARE BEING MET.
6.

MANAGERIAL ACCOUNTING INFORMATION

GENERALLY PERTAINS TO AN ENTITY AS A
WHOLE AND IS HIGHLY AGGREGATED.
7.

JOB ORDER COSTING SYSTEM IS FOR ALLOCATING

COSTS TO GROUP OF UNIQUE PRODUCT AND IS
APPLICABLE TO THE PRODUCTION OF CUSTOMER
SPECIFIED PRODUCTS SUCH AS THE MEASURE OF
SPECIAL MACHINE.
8.

PROCESS COSTING IS USED BY COMPANIES

MAKING ONE-OF-A-KIND PRODUCTS.
9.

OPERATION COSTING IS A HYBRID COSTING

SYSTEM OFTEN USED IN REPETITIVE
MANUFACTURING WHERE FINISHED
PRODUCTS HAVE COMMON AS WELL AS
DISTINGUISHING CHARACTERISTICS.
10.

COST ACCOUNTING PROCEDURES HELP

MANAGEMENT IN GATHERING THE DATA
NEEDED TO DETERMINE PRODUCT COSTS AND
THUS GENERATE MEANINGFUL FINANCIAL
STATEMENT AND OTHER REPORTS.