Cost Accounting is defined as the costs acquired in the creation of entities of a business. Secondly, financial accounting is the term in which accounting worried about record-keeping of a business, to display accurate place of the business. financial and Cost accounting assignment help sections from BookMyEssay are helping to better understand the subjects.
Definition of Cost Accounting
Cost Accounting is used to note, outline and give details of the cost information on a monthly basis. This main role is to determine and controlling costs. Cost accounting is done for the budget preparation and profitability analysis. Cost Accounting has divided into two systems, which are:
- Non-Integrated Accounting System: This system maintains the cost information in the different set of books.
- Integrated Accounting System: This system is maintaining the cost and accounting data in a single set of book.
Define Of Financial Accounting
Financial accounting keeps track of book-keeping records and making an abstract of financial agreement, and when this data is created and shown in reports for the utilization of the public outside the organization, this is called as financial accounting.
Cost Accounting v/s Financial Accounting
There are some major characteristics of cost accounting and financial accounting which varied from each other:
- Objective: Cost Accounting objective is to keep cost records of a business. Financial Accounting objective is to keep all the financial data of a business.
- Cost Records: Cost Accounting Records both historical and predefined costs. On the other hand, Financial Accounting records only one cost i.e. historical costs.
- Users: Users are restricted to internal management only, whereas Financial Accounting users are not limited to internal management but also connect with outer public too.
- Stock Value: Cost accounting depend on the cost of stock Although in financial accounting, the stock value varies.
- Mandatory Factor: Cost Accounting is compulsory only for the company which is occupied in industrialized and production activities. Differently, Financial Accounting is compulsory for all the companies, as well as Income tax.
- Time Interval: Cost Accounting record is display at normal intervals, but financial accounting record is reported after the completing of the financial year.
- Profit: Cost Accounting profits depend upon product, job or process. On the other hand, Financial Accounting profit depends on the complete organization.
- Purpose: Cost Accounting is controlling the costs, On the other hand, financial accounting purpose is to maintain the records of the financial transactions.
Differences Between Cost Accounting and Finance Accounting.
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