What is the relationship between cost accounting financial accounting and managerial accounting?

Answer 1

 Financial

Accounting is “the art of recording, classifying and summarizing in a significant

manner in terms of money transactions and events which are in part at least of a

financial character, and interpreting the results thereof”. Accounting is the language

effectively employed to communicate the financial information of a business unit of

various parities interested in its progress.

The object of financial accounting is to find out the profitability and to provide

information about the financial position of the concern. Two important statements of

financial accounting are Income and Expenditure Statement and Balance Sheet.

All revenue transactions relating to a particular period are recorded in this statement

to decide the profitability of the concern. The balance sheet is prepared at a particular

date to determine the financial position of the concern

1.6.2 Cost Accounting

Cost accounting is one of the important elements of accounting information about the

problems of internal managerial control. Financial accounts are unable to meet

information needs about the cost structure of a product. The need for cost

determination and controls necessitated new set of principles of accounting and thus

emerged ‘Cost accounting’ as a specialised branch of accounting. Cost accounting is

the process of accounting for costs. It includes the accounting procedures relating to

recording of all income and expenditure and preparation of periodical statements and

report with the object of ascertaining and controlling costs. Such cost accounting is a

good technique for ascertaining profitability and for decision making

Management Accounting

Cost accounting helps the internal management by directing their attention on

inefficient operations and assisting in a day-to-day control of business activities.

The costing data needs to be arranged, re-analysed and processed further for effective

role in managerial process. In addition to costing and accounting data, managerial

functions need the use of socio-economic and statistical data (e.g., population

break-ups, income structure, etc.). Cost and financial accounting do not provide such

information and this limitation pave the way for the emergence of management

accounting. Management accounting is a systematic approach to planning and control

functions of management. It generates information for establishing plans andcontrols. It provides for a system of setting standards, plans, or targets and reporting

variances between planned and actual performances for corrective actions. Thus,

Management accounting consists of cost accounting, budgetory control, inventory

control, statistical methods, internal auditing and reporting. It also covers financial

accounting.

Management accounting is the process of identification, measurement, accumulation,

analysis, preparation, interpretation and accumulation of financial information used

by management to plan, evaluate, and control within an organisation and to assure

appropriate use of and accountability for its resources.

Answer 2

cost accounting, financial accounting and managerial accounting are all related to the organization. cost accounting is used to determine cost of business operations, financial accounting shows the financial position of that organization either strong or weak, managerial accounting used by internal parties (management) to know about their organization and to make shareholders interested in it.

Answer 3

Juliana Company has two support departments: Information Systems and Human Resources. The
Information Systems Department's costs of $200,000 are allocated on the basis of standard hours. The Human
Resources Department's costs of $400,000 are allocated based on the number of employees. Costs of Operating
Department Assembly and Testing are $700,000 and $150,000 respectively.
Data on standard service hours and number of employees are as follows:
Support Departments Operating Departments
Information Systems Human Resource Assembly Testing
Standard Hours 400 250 350
Percentage 40 % 25 % 35 %
Number of Employees 30 120 50
Percentage 15 % 60 % 25 %
What are the allocation of costs of Support Departments Information Systems and Human Resources to Operating
Departments Assembly and Testing using the reciprical method?

Answer 4

Cost accounting, managment accounting, and financial accounting all use basic financial accounting concepts to arrive at their indended goal. All 3 use techniques such as depreciation, present values, future values, accruals, deferals, and inventory valuations (such as LIFO and FIFO). Although the reports that they create are each different, the basic statements remain similar in construction and terminology. Managment accounting is specifically for the use of top level managers who are interested in appeasing shareholders. Therefore, managerial accounting is constantly searching for higher net incomes and benefits for the shareholders.

Answer 5

Cost accounting, managment accounting, and financial accounting all use basic financial accounting concepts to arrive at their indended goal. All 3 use techniques such as depreciation, present values, future values, accruals, deferals, and inventory valuations (such as LIFO and FIFO). Although the reports that they create are each different, the basic statements remain similar in construction and terminology. Managment accounting is specifically for the use of top level managers who are interested in appeasing shareholders. Therefore, managerial accounting is constantly searching for higher net incomes and benefits for the shareholders.

Answer 6

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