INTERVIEW QUESTIONS COMMERCE ACCOUNTANCY DETAILS

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

Answer: For simplistic purposes, there is not much, if any, difference between "cost accounting" and "management accounting". These terms refer to the accounting techniques used internally by a company's management to determine the costs of running the business and help in decision making. For example, reports that compare budgeted to actual expenses are commonly used to monitor the successful management of a specific department or store within a larger enterprise.

Financial Accounting refers to accounting practices that result in financial statements used by various stakeholders of the business. Stakeholders may include management and employees, as well as vendors, suppliers, customers, bankers and regulators. The accounting practices used in compiling financial statements are referred to as "GAAP" or the generally accepted accounting principles as set forth by the Financial Accounting Standards Board in the U.S. In the U.S., external financial reports issued by public and/or regulated companies must comply with GAAP.

Some accounting methods used in cost accounting are not recognized by GAAP and therefore can only be used internally.

For simplistic purposes, there is not much, if any, difference between "cost accounting" and "management accounting". These terms refer to the accounting techniques used internally by a company's management to determine the costs of running the business and help in decision making. For example, reports that compare budgeted to actual expenses are commonly used to monitor the successful management of a specific department or store within a larger enterprise.

Financial Accounting refers to accounting practices that result in financial statements used by various stakeholders of the business. Stakeholders may include management and employees, as well as vendors, suppliers, customers, bankers and regulators. The accounting practices used in compiling financial statements are referred to as "GAAP" or the generally accepted accounting principles as set forth by the Financial Accounting Standards Board in the U.S. In the U.S., external financial reports issued by public and/or regulated companies must comply with GAAP.

Some accounting methods used in cost accounting are not recognized by GAAP and therefore can only be used internally. Source: CoolInterview.com

cost Acconting deal the cost of production in which work in process stock over all cost of product in which include fixed cost variable cost are discussed in detailed.
managerial accounting deal to managing the organizations decision like sellect one project from many projects which is better for the organization.
financial management deal with finance of the organization. it is duty of financial manager to creat the fund and invest in better way. it can helpful to achieving the goal with in the given resources. financial management tells us how we create fund and how we invest it for best rate of return. Source: CoolInterview.com

Management accounting is concerned with the provisions and use of accounting and other information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions. Unlike financial accountancy information (which, for public companies, is public information), management accounting information is used within an organization (typically for decision-making) and is usually confidential and its access available only to a select few.

Cost Accounting actually operates within Management Accounting. Management Accounting evolved from cost Accounting as businesses became more complex and diversified, Thus, more comprehensive data was needed in order to help management make decisions, rather than the typical Product Costing reports. Management Accountants are also involved in other accounting related functions such as Long Term Planning, Budgeting and Forecasting. Again, cost accounting data is used to as part of the process, however, other analyses are also part of the Management Accountant’s role.
Source: CoolInterview.com

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