Question

What is the difference between financial accounting management accounting and cost accounting?

Answer 1

HEY MATE !!!!

Financial accounting involves the preparation of a standard set of reports for an outside audience, which may include investors, creditors, credit rating agencies, and regulatory agencies. Cost accounting involves the preparation of a broad range of reports that management needs to run a business.

In brief, the key differences between cost and financial accounting are that cost accounting is inwardly focused on management decisions, while financial accounting is focused on issuing financial statements to outside parties.

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Management accounting includes a lot of aspects of business such as decision making, strategizing, planning, performance management, risk management etc.

Cost accounting, on the other hand, only revolves around cost computation, cost control, and overall cost reduction of business.

In simple terms, cost accounting is one of the sub-sets of management accounting. As a result, the scope and reach of management accounting are much broader and pervasive than cost accounting. So, we can say that management accounting can provide a helicopter view of the business by looking at each aspect qualitatively and quantitatively. Cost accounting only gives a pixel view of cost of each product, service, or process.

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Answer 2

Cost accounting involves the preparation of a broad range of reports that management needs to run a business. ... Financial accounting involves the preparation of a standard set of reports for an outside audience. Purpose: The readers may include investors, creditors, credit rating agencies, and regulatory agencies