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COST AND MANAGEMENT ACCOUNTING
Lecture 1
Introduction to Cost and Management Accounting
Definition of accounting?
The art of recording, classifying and summarizing in a significant manner in
terms of money, transaction and events which are, in part at least, of a financial
character, interpreting the result thereof. (AICPA)
Accounting Systems
Financial accounting, Management accounting, and Cost accounting
Financial accounting system - Provides information to decision-makers external
to the firm
Financial accounting involves recording the financial transactions of an
organization and summarizing them in periodic financial statements for external
users who wish to analyze and interpret the financial position of the
organization.
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What is Management accounting?
Management accounting has cost accounting as its essential foundation.
The main difference between management accounting and cost
accounting are as follows:
Cost accounting is mainly concerned with establishing the historical
cost of a product/service.
Mgt.accounting is concerned with historical information but it is also
forward-looking. It is concerned with both historical and future costs
of products/services. For examples budgets and forecasts.
Management accounting is also concerned with providing non-
financial information to managers.
Management accounting may include involvement in planning,
decision making and control.
What is Cost Accounting?
Cost accounting provides information to decision-makers internal to
the firm
Cost accounting is that field of accounting that measures, records and
reports information about costs.
Cost accounting is a system for recording data and producing
information about costs for the products produced by an organization
and/or the services it provides. It is also used to establish costs for
particular activities or responsibility centers. The terms cost
accounting and management accounting are often used to mean the
same thing.
COST AND MANAGEMENT ACCOUNTING
Lecture 1
Introduction to Cost and Management Accounting
Definition of accounting?
The art of recording, classifying and summarizing in a significant manner in
terms of money, transaction and events which are, in part at least, of a financial
character, interpreting the result thereof. (AICPA)
Accounting Systems
Financial accounting, Management accounting, and Cost accounting
Financial accounting system - Provides information to decision-makers external
to the firm
Financial accounting involves recording the financial transactions of an
organization and summarizing them in periodic financial statements for external
users who wish to analyze and interpret the financial position of the
organization.
, 2
What is Management accounting?
Management accounting has cost accounting as its essential foundation.
The main difference between management accounting and cost
accounting are as follows:
Cost accounting is mainly concerned with establishing the historical
cost of a product/service.
Mgt.accounting is concerned with historical information but it is also
forward-looking. It is concerned with both historical and future costs
of products/services. For examples budgets and forecasts.
Management accounting is also concerned with providing non-
financial information to managers.
Management accounting may include involvement in planning,
decision making and control.
What is Cost Accounting?
Cost accounting provides information to decision-makers internal to
the firm
Cost accounting is that field of accounting that measures, records and
reports information about costs.
Cost accounting is a system for recording data and producing
information about costs for the products produced by an organization
and/or the services it provides. It is also used to establish costs for
particular activities or responsibility centers. The terms cost
accounting and management accounting are often used to mean the
same thing.
