Question

Explain the term ‘Management Accounting’. Distinguish between Management Accounting and Cost Accounting.

Answer 1

COST ACCOUNTING-

• it is the branch of accounting that deals with the cost related to various segments and departments of the business.
• It evaluates the monetary transactions from any unit of the business and analyses it to find out profit and loss of the business.
• Its analysis is useful for investors, shareholder and users of the business.

MANAGEMENT ACCOUNTING-

• It is a subset of cost accounting.
• It deals with the planning and analysis of the management department of the company.
• Its analysis is used by the HR head or employees within the company.