Question

How cost accounting removing defects of financial accounting?

Answer 1

Answer:

Financial accounting is a process where all type of business transactions are placed in. Those transactions are based on historic point of view. Financial accounting don't record manufacturing accounts/transactions separately. So its tough to tell what is the actual cost of a product, manufactured by that company /firm.

Whereas Cost accounting is a accounting process which specifically record manufacturing transactions and calculate the actual cost of the product. We can even calculate the cost earlier than manufacturing and can specify each departments cost separately. It also helps to control the cost of the product. It helps to figure out the actual amount of profit from per piece or units also.