Difference between cost accounting and management accounting
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Answer:
The accounting related to the recording and analysing of cost data is cost acct. The accounting related to the producing information which is used by management of the company is management acct.
Cost Acct provides quantitative information only. On the contrary Management Acct. provides both quantitative and qualitative information.
Cost acct. is part of Management Acct. as the information is used by the management for making decisions.
The primary objective of Cost Acct. is the ascertainment of cost of producing a product, but the main object of the management acct. is to provide information to managers for setting goals and future activity.
There are specific rules and procedure for preparing cost acct. information while there is no specific rules and procedures in case of management acct. information.
The scope of Cost Acct. is limited to cost data however the Management Acct. has a wider area of operation like tax, budgeting, planning and forecasting, analysis, etc.
Cost Acct. is related to ascertainment, allocation, distribution and accounting face of cost. On the flip side, management acct. is associated with impact and effect aspect of cost.
Cost Acct. stresses on short-range planning, but management acct. focuses on long and short range planning, for which it uses high-level techniques such as probability structure, sensitive analysis etc.
While management acct. can’t be installed in the absence of accounting, cost acct. has no such requirement, it can be installed without management acct.
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Answer:
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