Question

Distinguish between financial accounting, cost accounting and management accounting.

Answer 1

The differences between financial accounting,cost accounting and management accounting are

$\begin{array}{cccc}\text{Basis}& \text{Financial Accounting}& \text{Csot Accounting}& \text{Management Accounting}\\ \text{Meaning}& \text{The process of identifying,}& \text{The process of ascertaining and controlling}& \text{The use of accounting techniques for}\\ & \text{measuring, recording, classifying,}& \text{the cost of a product, operation or function}& \text{providing information to help all levels}\\ & \text{summarising, analysing,}& \text{is known as cost accounting.}& \text{of management in planning and}\\ & \text{interpreting and communicating}& & \text{controlling the activities of business to}\\ & \text{the financial transactions and}& & \text{enable decision-making is known as}\\ & \text{events is known as financial}& & \text{management accounting.}\\ & \text{accounting}& & \\ \text{Purpose}& \text{To keep record of all financial}& \text{To analyse the expenditure so as to}& \text{To assist the management in taking}\\ & \text{transactions.}& \text{ascertain the cost of various prodcuts}& \text{rational policy decision and to evaluate}\\ & & \text{manufactured by the firm and fix the prices.}& \text{the impact of its decision and actions.}\\ \text{Data used}& \text{Qualitative aspects are not}& \text{Only qualitative aspect is recorded.}& \text{Uses both qualitative and quantative}\\ & \text{recorded.}& & \text{concepts.}\end{array}$