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INTRODUCTION OF COST AND
MANAGERIAL
ACCOUNTING
18/03/2013
Cost accounting ?
Cost accounting is a formal system of accounting
for costs in the book of account by means of
which costs of product and services are
ascertained and controlled.
There is a difference between costing and cost
accounting.
Costing means finding out cost of product or
service by any technique or method, cost
accounting means costing using double entry
system.
Objectives and functions of
cost accounting
i. Ascertainment of cost
ii. Control of cost
iii. Guide to business policy
iv. Determination of selling price
v. Measuring and improving
performance
Difference between financial and
cost accounting
Purpose
Statutory requirement
Analysis of cost and profit
Perodicity of reporting
Control aspect
Historical and predetermined costs
Format of presenting information
Types of transaction recorded
Types of statements prepared
Costing system and its installation
Steps in installation:
1. Preliminary investigation
2. Organization structure
3. Modification of methods
4. Examined methods
5. Record designed
6. Size studied
7. Effectiveness
8. Avoid unnecessary details
9. Operation of system
10. Introduction
Management accounting & its
relation to cost & financial
accounting
Management accounting means any form of accounting
which enables a business to be conducted more efficiently.
It is an integral part of the mangement which is
concerned with identifying, presenting and interpreting
information used for:
 formulating strategy
 planning and controlling activites
 decision making
 optimising the use of resources
 disclosure to shareholder
 safeguarding assets
Preparing
profit &loss
account &
balance sheet
Analysing
cost for
control &
maximizing
efficiency
Assisting
management
for planning,
decision
making and
control
Financial
accounting
Cost accounting
Management
accounting
Scope of Management
Accounting
1. Financial accounting
2. Cost accounting
3. Budegting and forecasting
4. Tax planning
5. Reporting to management
6. Cost control procedures
7. Statistical tools
8. Internal control and internal audit
9. Financial analysis and interpretation
10. Office services
THANK YOU

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Introduction of cost and managerial accounting

  • 1. INTRODUCTION OF COST AND MANAGERIAL ACCOUNTING 18/03/2013
  • 2.
  • 3. Cost accounting ? Cost accounting is a formal system of accounting for costs in the book of account by means of which costs of product and services are ascertained and controlled. There is a difference between costing and cost accounting. Costing means finding out cost of product or service by any technique or method, cost accounting means costing using double entry system.
  • 4. Objectives and functions of cost accounting i. Ascertainment of cost ii. Control of cost iii. Guide to business policy iv. Determination of selling price v. Measuring and improving performance
  • 5. Difference between financial and cost accounting Purpose Statutory requirement Analysis of cost and profit Perodicity of reporting Control aspect
  • 6. Historical and predetermined costs Format of presenting information Types of transaction recorded Types of statements prepared
  • 7. Costing system and its installation Steps in installation: 1. Preliminary investigation 2. Organization structure 3. Modification of methods 4. Examined methods 5. Record designed
  • 8. 6. Size studied 7. Effectiveness 8. Avoid unnecessary details 9. Operation of system 10. Introduction
  • 9. Management accounting & its relation to cost & financial accounting Management accounting means any form of accounting which enables a business to be conducted more efficiently. It is an integral part of the mangement which is concerned with identifying, presenting and interpreting information used for:  formulating strategy  planning and controlling activites  decision making  optimising the use of resources  disclosure to shareholder  safeguarding assets
  • 10. Preparing profit &loss account & balance sheet Analysing cost for control & maximizing efficiency Assisting management for planning, decision making and control Financial accounting Cost accounting Management accounting
  • 11. Scope of Management Accounting 1. Financial accounting 2. Cost accounting 3. Budegting and forecasting 4. Tax planning
  • 12. 5. Reporting to management 6. Cost control procedures 7. Statistical tools 8. Internal control and internal audit 9. Financial analysis and interpretation 10. Office services