difference between cost accounting and financial accounting

Topics: Income statement, Balance sheet, Management accounting Pages: 4 (1267 words) Published: October 26, 2013
In recent years, the range of accounting application is expanding rapidly, along with the increasing demand of economic market. As is well known, accounting is a key aspect of business. And in the accounting profession, there has been already existed interpenetration and overlapping among the different kinds of accounting. Cost accounting and financial accounting are two main components of accountancy. The former one is a part of accounting. In cost accounting, it dramatically researches the variable cost, fixed cost, overheads and capital cost, which is beneficial to calculate the cost and control the cost. And in another part of accounting, financial accounting, we record the business and make the financial statements through this kind of approaches. There are lots of similarities and differences between these two methods. Meanwhile, each of them has its own scope of application. People use different accounting methods to solve different financial problems. Cost accounting refers to the total cost of the products. It is a mixture of financial accounting and management accounting, and it is a method to analyze the cost information. The former method is a procedure of gathering, calculating, concluding and evaluating various alternative courses of action, (Vanderbeck, E. J.2013), while the latter one is a field of accounting, which is considered to be the provision of financial statements prepared for decision makers and other stakeholders. (Wikipedia, 2013). The latter method is the process of integrating financial data that taken from an organization's accounting records and issuing in the form of statements for the advantages of people outside the organization for an interval time. (Weil, R. L.2012). More and more differences are appeared in cost accounting and financial accounting. Firstly, we use them for different purposes. Cost accounting aims at calculating cost of production or service in a scientific way and then facilitating cost control and cost...
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