Difference Between Management Accounting And Cost Accounting

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1.2.2. Cost Accounting versus Management Accounting Management accounting and cost accounting are the major aspects of internal control for a business. The boundaries are narrow between both as they are complementary in nature. The management of an organisation needs a proper cost accounting system to get detailed information on costs. Without proper reports, the management will not be able to use the data effectively. Cost accounting deals only with quantity, whereas management accounting deals with both quantity and quality. Let us further understand the differences between the two: Table 1.2.1: Differences between Management Accounting and Cost Accounting Nature Cost Accounting Management Accounting Concept It is the process of recording, classifying and summarising cost data/information of an organisation It deals with the effect and impact of the costs on the business Purpose To ascertain cost of a product To act as a source of information to the management to make strategic decisions Scope Limited to providing information related to cost Related to providing accounting as well as non-accounting information Focus Focuses on the ascertainment of cost and cost control to maximise profit Focuses on planning, controlling and decision-making to maximise profit Planning Period It is concerned with the short-term planning It deals with both short-term and long-term planning with the help of various tools and techniques Legal Aspect(s) Record maintenance of costs as required

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