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
