Financial accounting, management accounting and cost accounting
Our portal www.takshilalearning.com offers online CS PREPARATION classes of CS COURSE. In such CS PREPARATION classes, CS Executive COACHING CLASSES video lectures with proper notes are also available.
In CS ONLINE COACHING CLASSES for CS PREPARATION in the CS COURSE one of the subject at Executive level is Cost and Management Accounting. In this subject we have a topic under management accounting viz, the difference between Financial accounting, management accounting and cost accounting which is explained below.
Difference between Financial accounting, management accounting, and cost accounting
| Basis of comparison | Financial accounting | Management accounting | Cost accounting |
| Meaning | Financial accounting is an accounting system that captures the records of financial information about the business to show the correct financial position of the company at a particular date. | In an organization, a system which helps to provides relevant information to the managers for making policies, plan and strategies for running the business effectively are known as management accounting.
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In an organization, the recording, classifying and summarizing of cost data is known as Cost Accounting.
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| Objective | Financial information to be provided to outsiders | Assisting the management in planning and decision- making process. | Ascertainment of cost. |
| Scope | Financial Accounting has wide scope and area of application. | Impact and effect aspect of costs. | Concerned with ascertainment, allocation and distribution and accounting aspects of cost. |
| User | Internal and external parties | Only internal management | Internal parties |
| Format | Specified | Not specified | Specified |
| Mandatory | Yes | No | No |
| Time of recording | At the end of accounting period | Complete and detailed reports regarding various information | Cost accounting are frequently prepared and reported to the management |
| Information | Monetary | Monetary and Non-monetary | Quantitative |
| Published and audited | By statutory auditor | It is for only internal use | By cost auditor |
| Planning | Long range planning | Short range planning and long range planning | Short range planning |
| Cost of recording | Historical cost only | Historical cost as well as predetermined cost | Historical cost as well as predetermined cost |
A complete explanation of Financial accounting, management accounting and cost accounting is available in CS online coaching classes for online CS PREPARATION – CS Foundation, CS executive, CS Professional.
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