Difference between Cost Accounting and Management Accounting

 Though Management accounting uses the tools of cost accounting like standard costing, marginal costing etc. and many people think that both cost and management accounting are same which is not the case because there are many differences between the two, here are some of them – 

 Objectives

Cost Accounting Management Accounting

The main objectives of Cost accounting are the ascertainment of cost, cost control and cost analysis.

The main objectives of Management Accounting are to help management at all level so that productivity and efficiency can be improved through planning, improved decision making and more effective control.

Recording Of Data

It records available cost data by operating a cost recording systems. When this information is available it is ofter compared with an estimated, budgeted cost.

It uses both cost and financial information to advise management in planning and controlling the organization.

Concern

Cost accounting focuses on current years activities.

Management accounting is concerned with short range and long range planning. Approach

Cost accounting is mostly historical in its approach and it projects the past.

Management accounting is  futuristic in its approach. It is more predictive in nature than cost accounting.

Area of Operation

Cost accounting operates in restricted areas .

Management accounting has almost an unrestricted area operation since it is concern with the system as a whole and the overall vitality of the organization.

Area of Operation

Cost accounting operates in restricted areas .

Management accounting has almost an unrestricted area operation since it is concern with the system as a whole and the overall vitality of the organization.

Users

Cost accounting is done for internal parties like top management, owners as well as external parties like creditors, employees, government

Management accounting is done for top management only

Scope

Cost accounting was evolved many years back and it is limited in its scope.

management accounting is still evolving but its scope is much wider than that of cost accounting because it uses along with cost accounting other principals of subjects like statistics, economics etc

 

 Difference between financial accounting and cost accounting:

 

	FINANCIAL ACCOUNTING	COST ACCOUNTING
OBJECTIVE	It provides information about	It provides information of

	financial performance and financial position of the business.	ascertainments of costs to control costs and for decision making about the costs.
NATURE	It classifies records, presents and interprets transactions in terms of money.	It classifies, records, presents and interprets in a significant manner materials, labour and overhead costs.
RECORDING OF DATA	It records historical data.	It records and presents estimated, budgeted data. It makes use of both historical costs and predetermined costs.
USERS OF INFORMATION	External users like shareholders, creditors, financial analysts, government and its agencies,etc.	Used by Internal management at different levels.
ANALYSIS OF COSTS AND PROFITS	It shows profit/loss of the organization.	It  provides details of costs and profit of each product, process, job,etc.
TIME PERIOD	They are prepared for a definite period, usually a year.	They are prepared as and when required.
PRESENTATION OF INFORMATION	A set format is used for presenting financial information.	There are no set formats for presenting cost informations.