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 costii. Control of costiii. Guide to business policyiv. Determination of selling pricev. 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 managementfor 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
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