Differentiate between cost accounting and financial accounting.

The major differences between cost accounting and financial accounting are as follows −

Cost accounting

• Records information related to production activities.

• Records both historical and forecasted costs.

• Main objective is fix selling price of the product by calculating per unit cost.

• Both monetary and non-monetary transactions are recorded.

• Prepared whenever is necessary.

• Not necessary to prepare any statements for public.

• No specific format.

• Forecasted using budgeting technique.

• Stock is valued at cost.

Financial accounting

• Records information which are financial in nature.

• Records only historical cost.

• Main objective is to assess the profitability and financial position.

• Only monetary transactions are recorded.

• Prepared at the end of accounting period.

• Public companies prepared as a part of financial accounting.

• Not possible to forecast financial accounting.

• GAAP and IFRS principles are used.

• Stock is valued at market price or cost, whichever is less.

Mandalika

Updated on 24-Jul-2020 07:06:57

• Related Questions & Answers
• Differentiate between accounting standards and accounting concepts.
• Differentiate between accounting breakeven point and financial breakeven point.
• Write the differences between financial accounting and management accounting.
• Write the difference between cost accounting and management accounting.
• Differentiate between finance and accounting.
• Differentiate cash accounting and accrual accounting.
• Compare economic cost and accounting cost.
• Differentiate between accounting profit and taxable profit
• Compare accounting and financial management.
• Compare costing and cost accounting
• Compare between accounting concepts and accounting convections.
• Compare between accounting and bookkeeping.
• What is financial breakeven point in accounting?
• Explain accounting period in finance and accounting.
• What is accounting and derive accounting equation?