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    03.cost and Management Accounting

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    Amisha Pandya
    This document compares cost accounting, financial accounting, and management accounting. Cost accounting records and analyzes costs to help management control costs and make decisions. Financial accounting records transactions and maintains accounts using standardized guidelines to produce financial statements for external stakeholders. Management accounting analyzes costs and prepares internal reports to help management formulate strategies, plan activities, and make decisions. Both cost and management accounting provide historical and predictive information to management, while financial accounting provides only historical data for external users.

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    03.cost and Management Accounting

    Uploaded by

    Amisha Pandya
    52 views13 pages
    This document compares cost accounting, financial accounting, and management accounting. Cost accounting records and analyzes costs to help management control costs and make decisions. Financial accounting records transactions and maintains accounts using standardized guidelines to produce financial statements for external stakeholders. Management accounting analyzes costs and prepares internal reports to help management formulate strategies, plan activities, and make decisions. Both cost and management accounting provide historical and predictive information to management, while financial accounting provides only historical data for external users.

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    Comparison of cost , financial and management accounting

    Original Title

    03.Cost and Management Accounting

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    This document compares cost accounting, financial accounting, and management accounting. Cost accounting records and analyzes costs to help management control costs and make decisions. Financial accounting records transactions and maintains accounts using standardized guidelines to produce financial statements for external stakeholders. Management accounting analyzes costs and prepares internal reports to help management formulate strategies, plan activities, and make decisions. Both cost and management accounting provide historical and predictive information to management, while financial accounting provides only historical data for external users.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    52 views13 pages

    03.cost and Management Accounting

    Uploaded by

    Amisha Pandya
    This document compares cost accounting, financial accounting, and management accounting. Cost accounting records and analyzes costs to help management control costs and make decisions. Financial accounting records transactions and maintains accounts using standardized guidelines to produce financial statements for external stakeholders. Management accounting analyzes costs and prepares internal reports to help management formulate strategies, plan activities, and make decisions. Both cost and management accounting provide historical and predictive information to management, while financial accounting provides only historical data for external users.

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    COMPARISON OF COST ACCOUNTING,

    FINANCIAL ACCOUNTING & MANAGEMENT


    ACCOUNTING

    Cost and Management Accounting

    Guided By: Presented By:


    Dr. Vedant Pandya Amisha Pandya

    Department Of Business Administration


    Maharaja Krishnakumarsinhji Bhavnagar University
    Introduction
    Cost Accounting

     Meaning:
     Recording all costs
     Improve management

     Definition:
     Recording
     Classifying
     Analyzing
     Summarizing
    Features:

     To determine costs
     Records income & expense
     Provide Statistical data
    Financial Accounting

     Meaning:
     Reporting

     Definition:
     Keep Financial transactions
     Using standardized guidelines
     Presented in Financial statements
     Features:

     Relevance
     Materiality
     Understability
     Reliability
     Comparability
    Management Accounting
     Meaning:
     Concerned with Information

     Definition:
     Analyzing business costs
     Prepare internal reports, records

     Features:
     Formulating strategy
     Planning & Controlling Activities
     Decision - Making
    Comparison of Cost Accounting & Financial Accounting
    No. Basis Cost Accounting Financial Accounting
    1. Purpose To provide detailed cost Record various transactions
    information to management. and maintaining accounts

    2. Which type of Historical and pre- Only historical cost.


    cost used? determined cost.
    3. Used for Employees, Shareholders,
    directors,managers creditors,customers
    4. Mandatory For manufacturing firms it is For all firms
    mandatory
    5. Valuation of Cost Cost whichever is less
    stock
    6. Time of Weekly,daily ,monthly End of the year
    Reporting
    7. Profit Analysis For Particular For particular period of whole
    product,job,batch process. entity.

    8. Forecasting Possible through budgeting Not possible.


    techniques.
    Comparison of Cost Accounting & Management Accounting
    No. Basis Cost Accounting Management Accounting
    1. Purpose To provide detailed cost Decision - Making
    information to management
    2. Used for Stakeholders, Shareholders Management only
    ,Management
    3. Nature Past and Present Future
    4. Scope Narrow Broader
    5. Measuring Quantitative. Quantitative and qualitative
    both.
    6. Sub-set Sub – set of Management Itself Stand alone
    Accounting
    7. Age Old concept Modern concept
    8. Statutory Yes, Statutory audit is No requirement for statutory
    requirement required audit
    9. Dependence Independent Dependent on both Financial
    & Cost accounting.
    Comparison of Financial Accounting & Management Accounting
    No. Basis Financial Accounting Management Accounting
    1. Purpose Record various transactions Decision - Making
    and maintaining accounts
    2. Used for Investors and Stakeholders Management only

    3. Nature Past – Historical Future- Historic &Predictive


    information Informations
    4. Scope Narrow Broader
    5. Measuring Quantitative Quantitative and qualitative
    both.

    6. Subject matter Deals with whole business. Deals Seperately with different
    unit.
    7. Statutory Yes, Statutory required No requirement for statutory .
    requirement

    8. Periodicity of For public use For Management only.


    Reporting
    9. Accounting Based on accounting No specific rules are adopted.
    principles principles.
    Conclusion
     Cost Accounting is helpful in the decision
    making of the managers to control costs, but
    it lacks comparability.
     Financial accounting is capable of making
    comparisons, but future forecasting cannot
    be done through this information.
     Both cost accounting & management
    accounting help management make effective
    decisions.
    Conclusion

     Financial accounting & management


    accounting, both are great tools for
    management to run the business well.
     Management accounting is solely devoted to
    serving management decision making.
     Financial accounting is mandatory as per the
    statutory requirement.
    Thank You

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