Distinguish between cost accounting and management accounting.

Question

Accepted Answer

Cost accounting and management accounting are related but distinct. The main points of difference are as follows.

| Basis of comparison | Cost Accounting | Management Accounting |
|---|---|---|
| Main concern | Ascertainment, recording and control of cost | Information for planning, decisions and control of the whole business |
| Scope | Narrower — limited to cost matters | Wider — covers cost accounting, financial accounting, budgeting, analysis and more |
| Data used | Mainly quantitative cost data | Both quantitative and qualitative, financial and non-financial data |
| Basis | Draws on financial accounting records | Draws on cost accounting and financial accounting and other sources |
| Time focus | Past and present costs, and cost control | More concerned with the future — forecasting and planning |
| Relationship | A part of, and a feeder to, management accounting | Uses cost accounting as one of its main tools |
| Techniques | Job, process, standard and marginal costing, etc. | All cost techniques plus ratio analysis, fund-flow, cash-flow, budgetary control, etc. |
| Installation | Can be installed on its own | Usually needs a good cost accounting system already in place | …

Q.Distinguish between cost accounting and management accounting.

Concept understanding — Management Accounting Compared with Financial and Cost Accounting

Basis of comparison	Cost Accounting	Management Accounting
Main concern	Ascertainment, recording and control of cost	Information for planning, decisions and control of the whole business
Scope	Narrower — limited to cost matters	Wider — covers cost accounting, financial accounting, budgeting, analysis and more
Data used	Mainly quantitative cost data	Both quantitative and qualitative, financial and non-financial data
Basis	Draws on financial accounting records	Draws on cost accounting and financial accounting and other sources
Time focus	Past and present costs, and cost control	More concerned with the future — forecasting and planning
Relationship	A part of, and a feeder to, management accounting	Uses cost accounting as one of its main tools
Techniques	Job, process, standard and marginal costing, etc.	All cost techniques plus ratio analysis, fund-flow, cash-flow, budgetary control, etc.
Installation	Can be installed on its own	Usually needs a good cost accounting system already in place

Q.Distinguish between cost accounting and management accounting.

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