Cost Accounting VS Management Accounting, Development of cost accounting is as a result of the limitations of financial accounting. Cost accounting is the art of classification, analysis, and division. Thereby determining and controlling the cost of the item or service.
Management accounting is a method of accounting that is about planning and controlling the ongoing processes and giving factual information on management for decision making in special cases.
So, It also stores, analyzes and renders all types of accounting information useful for management accounting.
For fulfilling all these functions and objectives, the management accounting cost data receives wild information from the cost accounting itself.
Hence, cost accounting is a part of financial accounting.
Difference between Cost Accounting and Management Accounting
Following are the main Difference between Cost Accounting and Management Accounting:
Cost accounting is the responsibility of the industrial revolution, it was developed at the beginning of the twentieth century.
Management accounting is a modern age, it has been developed in the past four decades.
The main purpose of cost accounting is to determine the cost of the item or service. But currently cost analysis, cost-wise assessment for cost control decisions is also the purpose of cost accounting.
Thus, the purpose of managing to account is to provide the managerial with the necessary accounting information to efficiently execute their managerial tasks.
Cost accounting is only related to cost data, hence it is only part of the management accounting.
It is related to past and present events, so it is used in both past and present data.
Thus, It is primarily related to the projection for the future, so this cost is of much more predictive nature than cost accounting.
5. Figures Used
Only those transactions or events are considered in cost accounting.
Those which can be expressed in the numbers, meaning that only the quantitative side is recorded.
But in management accounting, Both quantitative and qualitative information is used. The final Differences – Cost Accounting VS Management Accounting are below.
6. Cost Aspect
It is only about determining the division and distribution-related. It is more related to the impact of costs.
So that is the top difference between cost accounting and financial management.
7. Basis of Principles
In cost accounting, Some of the principles and action methods are followed in order to record the needs of different products.
Cost accounting is also a branch of accounting. The process of determining this cost and technical planning decision making and control is the basic managerial task.
The cost accounting system provides essential equipment such as standard cost, budget control, control, the marginal cost for efficient completion of these tasks.
Thus, the objective of managing to account is to select such data from classification and analysis.
Which can help the management in its work and planning, operations, control decisions?