Cost accounting is usually involved with management accounting. Financial accounting tends to deal with the past and presents information like statements for public and private use. Management accountants are involved with the budgeting and costing sides of things and present information only for the sole users of the business, so only internal uses like management, shareholders etc.
Financial accounting refers
to
the branch that prepared financial reports
(known as financial statements)
that are for
general use. Primarily however, they are prepared
for external users (owners, investors,
government, suppliers, creditors).
The
goal of financial accounting is to provide financial
statements that follow generally accepted accounting standards or GAAP. Cost accounting is the branch
that focuses on manufacturing costs,
i.e. direct materials, direct labor, and
factory overhead. It is often
considered
part of management
accounting,
the branch
that provides information
for internal purposes
and
focuses on helping management make decisions instead of strictly complying with GAAP. Cost
accounting
deals with manufacturing
concerns.
OBJECTIVES OF COST ACCOUNTING
The main objectives of cost accounting are:
1. To determine the cost of a product, process or service
5. To serve as a guide by providing actual data for comparison
To assist the management in devising suitable policy decisions in
other key areas