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UGC NET EXAMINATION 2019 METHODS TO UNDERSTAND COST ACCOUNTING IN 60 MINUTES By:- Assistant Professor(Ms.)Ashima Negi Candidate For Doctorate ( Ph.D.) UGC NET-Management. CA(I), MBA Finance, BBA, PGDM-Materials Management, NCFM, TQM & ISO 9000, QS 9000 & Assurance, CCIBL.
CONTENTS INTRODUCTION DIFFERENCE BETWEEN COST ACCOUNTING AND FINANCIAL ACCOUNTIN STANDARD COSTING BUDGETS. ACTIVITY BASED COSTING TRANSFER PRICING.
DIFFERENCE BETWEEN COST ACCOUNTING AND FINANCIAL ACCOUNTING Cost Accounting refers to that branch of accounting which deals with costs incurred in the production of units of an organization. On the other hand, financial accounting refers to the accounting oncerned with recording financial data of an organization, in order to it exact position of the business.
BASIS FOR COMPARISON COST ACCOUNTING FINANCIAL ACCOUNTING Meaning Cost Accounting is an accounting system, through which an organization keeps the track of various costs incurred in the business in production activities Financial Accounting is an accounting system that captures the records of financial information about the business to show the correct financial position of the company at a particular date. Records the information which are in monetary terms. Information type Records the information related to material, labor and overhead, which are used in the production process Which type of cost is used for recording? Valuation of Stock Both historical and pre-determined cost Only historical cost. Cost or Net Realizable Value, whichever is less. At cost No, except for manufacturing firms it is mandatory Mandatory Yes for all firms. Time of Reporting Details provided by cost accounting are frequently prepared and reported to the management. Financial statements are reported at the end of the accounting period, which is normally 1 year