{"id":4504,"date":"2022-01-23T13:13:56","date_gmt":"2022-01-23T13:13:56","guid":{"rendered":"https:\/\/commerceiets.com\/?p=4504"},"modified":"2022-01-23T13:13:56","modified_gmt":"2022-01-23T13:13:56","slug":"difference-between-management-accounting-and-cost-accounting","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/","title":{"rendered":"Difference between Management Accounting and Cost Accounting"},"content":{"rendered":"\n<p><strong>DIFFERENCE BETWEEN MANAGEMENT ACCOUNTING AND COST ACCOUNTING<\/strong><\/p>\n\n\n\n<p><strong>In this post you will study Difference between Management Accounting and Cost Accounting. Study and make the proper notes grabbing full understanding of this topic.<\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_64 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/#MANAGEMENT_ACCOUNTING\" title=\"MANAGEMENT ACCOUNTING\">MANAGEMENT ACCOUNTING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/#COST_ACCOUNTING\" title=\"COST ACCOUNTING\">COST ACCOUNTING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\" id=\"management-accounting\"><span class=\"ez-toc-section\" id=\"MANAGEMENT_ACCOUNTING\"><\/span><strong>MANAGEMENT ACCOUNTING<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Management Accounting is the Identification, Measurement, Accumulation, Analyses, Preparation, Interpretation and Communication of information that assists managers in fulfilling organizational objectives. Management accounting is all about supplying right information to right people at the right time.<\/p>\n\n\n\n<p>American Accounting Association has defined management accounting as:<\/p>\n\n\n\n<p>&#8220;Management accounting is the application of appropriate techniques and concepts in processing historical and projected economic data of any entity to assist management in establishing plans for reasonable economic objectives in the making of rational decisions with a view towards these objectives&#8221;.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"cost-accounting\"><span class=\"ez-toc-section\" id=\"COST_ACCOUNTING\"><\/span><strong><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">COST ACCOUNTING<\/a><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Cost&nbsp;Accounting&nbsp;is an art or process of recording, analysing and classifying of expenditure for the purpose of product costing or service costing, ascertainment of profitability, operational planning and cost control. It is a forward-looking approach which is related to the recording, analysing and classifying of expenditure with the objective of ascertaining the total and per unit cost of product or service.<\/p>\n\n\n\n<p>ICMA (Institute of Cost and Management Accountants) defined Cost Accounting as \u201cCost accounting is the process of accounting for cost from the point at which expenditure is incurred or committed to the establishment of its ultimate relationship with cost centres and cost units. In its widest usage, it embraces the preparation of statistical data, the application of cost control methods and ascertainment of the profitability of activities carried out or planned.\u201d<\/p>\n\n\n\n<p>RN Carter defined Cost Accounting as \u201cIt is a system of recording in accounts the materials used and labour employed in the manufacture of certain commodity or on a particular job.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"292\" height=\"164\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/01\/images-3.jpg\" alt=\"Difference between Management Accounting and Cost Accounting\" class=\"wp-image-4506\"\/><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Basis of Difference<\/td><td>Management Accounting<\/td><td>Cost Accounting<\/td><\/tr><tr><td>Scope<\/td><td>The scope of management accounting is wider than that of cost accounting and uses data from both cost and financial accounts and supplies the information to management for managerial uses.<\/td><td>Cost accounting is having narrow scope. It is limited only to those transactions which are related to cost of production. So, scope is only limited to cost.<\/td><\/tr><tr><td>Objective<\/td><td>The main objective of management accounting is to use accounting information to take various managerial decisions and to maximize the value of the firm.<\/td><td>The main objective of cost accounting is to sustain the cost of production and to control the cost.<\/td><\/tr><tr><td>Tools Used<\/td><td>Management accounting uses all the tools used by the cost but as its role is wider than cost accounting it uses another tools like ratio analysis, fund flow analysis, operations research, statistical methods to analyse and interpretate the data for use of management.<\/td><td>Cost accounting in order to control the cost uses various techniques like standard costing, marginal costing, budgetary control and unit costing etc.<\/td><\/tr><tr><td>Method<\/td><td>As management accounting is for the use of the management. The users interpret the results and apply that methods and procedures for preparation of accounts which suits their needs.<\/td><td>Cost accounts are prepared according to some set of rules and standards.<\/td><\/tr><tr><td>Double entry system<\/td><td>It is not applied.<\/td><td>It is applied in cost accounting.<\/td><\/tr><tr><td>Accounting Period<\/td><td>Management accounting is for the use of the management. The users interpretate the results and apply that methods and procedures for preparation of accounts which suits their needs.<\/td><td>In cost accounting accounts are prepared normally for current year activities and no futuristic approach is there.<\/td><\/tr><tr><td>Evolution<\/td><td>Management accounting has taken birth from the limitation of the cost accounting. As costing only highlights on the cost and management accounting is a continuous watchful process to collect the data available from cost and financial records and assess the need for their revision and improvement.<\/td><td>Cost accounting has taken birth due to limitation that financial accounting fails to predict the information relating to cost aspects of particular product or a product line.<\/td><\/tr><tr><td>Variance Analysis <\/td><td>The management accountant will not only make variance analysis but also suggest the ways and means for improving the operations.<\/td><td>The cost accountant will compare actual performance with standard performance and report to management for necessary actions.<\/td><\/tr><tr><td>Status in hierarchy level<\/td><td>Management accountant is placed at higher hierarchy level.<\/td><td>Cost accountant is placed at lower level in hierarchy.<\/td><\/tr><tr><td>Dependence<\/td><td>Management accounting system is dependent upon the information supplied by cost accounting so it cannot be installed without it.<\/td><td>Cost accounting system may be installed without management accounting.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"conclusion\"><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><strong>CONCLUSION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>To sum up, management accounting is concerned with a system as a whole. The function of management accountant is inevitable extension of that of cost accountant. The role of cost accountant is not complete as long as he extends his activities to areas of management accountant.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>DIFFERENCE BETWEEN MANAGEMENT ACCOUNTING AND COST ACCOUNTING In this post you will study Difference between Management Accounting and Cost Accounting. Study and make the proper notes grabbing full understanding of this topic. MANAGEMENT ACCOUNTING Management Accounting is the Identification, Measurement, Accumulation, Analyses, Preparation, Interpretation and Communication of information that assists managers in fulfilling organizational objectives&#8230;.<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;Difference between Management Accounting and Cost Accounting&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":4506,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187,56,231],"tags":[190,233,234],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/4504"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=4504"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/4504\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/4506"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=4504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=4504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=4504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}