1. Cost Accounting :
Cost accounting refers to an accounting system that revolves around cost computation, cost control and cost reduction. The main objective of it is to determine the cost of production and control the cost. It helps a business not to go beyond budget. We can consider it as a subset of bigger management accounting. It does not depend on management accounting to be successfully implemented. So, success of cost accounting is independent upon management accounting. Cost Accounting mainly used for management, shareholder and vendor etc.
2. Management Accounting :
Management accounting refers to an accounting system that helps management make effective decisions about business. It is also known as Managerial accounting. The main objective of it is to assist the management by providing necessary accounting information. It helps a business to make more effective strategies. Management accounting depends on financial and cost accounting for successful implementation. Management accounting mainly used for management.
Difference between Cost Accounting and Management Accounting :
|S.No.||COST ACCOUNTING||MANAGEMENT ACCOUNTING|
|01.||Cost accounting refers to an accounting system that revolves around cost computation, cost control and cost reduction.||Management accounting refers to an accounting system that helps management make effective decisions about business.|
|02.||The main objective of it is to determine the cost of production and control the cost.||The main objective of it is to assist the management by providing necessary accounting information.|
|03.||Cost accountant is placed at lower level at hierarchy than management accountant in an organizational setup.||Management accountant is placed at higher level at hierarchy than cost accountant in organizational setup.|
|04.||Cost accounting is based on data derived from financial accountants.||Management accounting is based on data derived from financial accounting, cost accounting and other sources.|
|05.||It can be installed without management accounting.||It can not be installed without cost accounting.|
|06.||Cost accounting uses quantitative data only.||Where management accounting uses both quantitative and qualitative data.|
|07.||Cost accounting uses both past and present data and figure.||Management accounting uses past data and future data for projection of future.|
|08.||The scope of cost accounting is limited in cost determination and record.||The scope of management accounting is broad which includes financial and cost accounting.|
|09.||Success of cost accounting does not depend on management accounting.||Success of management accounting depends on cost accounting.|
|10.||It follows a specific procedure means there is definite principle for ascertaining cost and format.||It does not follow a specific procedure means there is no definite principle for it as the format changes based on management’s requirement.|
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