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Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future. [ 2 ] Cost accounting information is also commonly used in financial accounting , but its primary function is for use by managers to facilitate their decision-making.
Cost Accounting is an internal reporting system for an organisation's own management for decision making. In financial accounting, cost classification based on type of transactions, e.g. salaries, repairs, insurance, stores etc. In cost accounting, classification is basically on the basis of functions, activities, products, process and on ...
Traditional standard costing (TSC), used in cost accounting, dates back to the 1920s and is a central method in management accounting practiced today because it is used for financial statement reporting for the valuation of income statement and balance sheet line items such as cost of goods sold (COGS) and inventory valuation.
Accounting can be divided into several fields including financial accounting, management accounting, tax accounting and cost accounting. [5] Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors ...
Alternatives to traditional cost accounting have been proposed by various management theorists. These include: Throughput accounting , under the Theory of Constraints , under which only totally variable costs are included in cost of goods sold and inventory is treated as investment.
It includes: External Financial Reporting Decisions, Planning, budgeting, forecasting, performance management, cost management and internal controls. Part 2 covers Financial Decision Making and includes financial statement analysis, corporate finance, decision analysis, risk management, investment decisions & Professional Ethics. [12]