Costing Information

System

I am writing for some help in clarification on the following two questions:<BR><BR>1. What is the main differences between financial accounting and cost accounting.<BR><BR>2. How can cost information can be used to assist in the three main roles of management: decision-making, planning and control.<BR><BR>Any help and one or both question would be appreciated.<BR><BR>Regards<BR><BR>Lisa

System

Costing Information

Hey there. Here's a few ideas.... <BR><BR>1. What is the main differences between financial accounting and cost accounting.<BR><BR>Financial Accounting generally involves the preparation of final accounts to P&L and Balance Sheet, tend to have an established format and are used to let people EXTERNAL to the organisation know about the financial activity of the business. It tends to be more historical and reports on previous periods. Cost Accounting tends to be the collection and presentation of costs and revenues, and may include budget setting and decision making - therefore more concerned with future planning. It is usually not a set format - individually determined by each organisation, and is also more geared towards internal reporting to Management and Staff. <BR><BR><BR>2. How can cost information can be used to assist in the three main roles of management: decision-making, planning and control.<BR><BR>Decision-making - eg whether to cease production of a particular product based on it's cost and revenue<BR>Planning - eg Budget setting for future periods/years by means of as accurately as possible forecasting costs<BR>Control - eg Reviewing projected costs against actual costs and identifying/addressing any discrepancies<BR><BR>Hope this helps a bit...<BR><BR>Claire <BR><BR><BR>