Skip to content
CommerceMates
  • Notes
    • Accountancy
    • Auditing
    • Human Resource Management
    • Corporate Governance
    • Business Studies
      • Business communication
      • Business Ethics
      • Business Environment
      • Consumer Protection
      • Management
      • IT in Business
      • Entrepreneurship
      • International Business
    • Economics
    • Statistic
    • Research Methodology
    • Financial System
      • Financial Management
      • Banking
      • Goods and Services Tax
      • Insurance
      • Investment
    • Marketing
  • Q&A
CommerceMates
  • Notes
    • Accountancy
    • Auditing
    • Human Resource Management
    • Corporate Governance
    • Business Studies
      • Business communication
      • Business Ethics
      • Business Environment
      • Consumer Protection
      • Management
      • IT in Business
      • Entrepreneurship
      • International Business
    • Economics
    • Statistic
    • Research Methodology
    • Financial System
      • Financial Management
      • Banking
      • Goods and Services Tax
      • Insurance
      • Investment
    • Marketing
  • Q&A

Difference between Cost Accounts and Financial Accounts

Home » Accountancy » Difference between Cost Accounts and Financial Accounts

Difference between Cost Accounts and Financial Accounts

Objective

 The main objective of cost accounting is to provide cost information to management for decision making. The main the objective of financial accounting is to prepare Profit and loss A/c and balance sheets to report to owner and outsiders.

Legal Requirement

Cost accounts ares maintained to fulfil the internal requirements of the management as per conventional guideline. Financial records are maintained as per the requirement of Companies Act and Income Tax Act.

Classification of Transactions 

Cost Accounting records and analyses expenditure in an objective manner viz., according to purpose for which costs are incurred. Financial accounting classifies records and analyses transactions in a subjective manner i.e., according to nature expenses.

Stock Valuation

In cost accounts stocks are valued at cost. In financial accounts, stocks are valued at cost or realisable value, whichever is lesser.

Analysis of Profit and Cost 

Cost accounts reveal Profit of Loss of different products departments separately. In financial accounts, Profit or Loss of the entire enterprise is disclosed

Accounting period 

Cost report are continuous process and are prepared as per the requirements of managements, may be daily, weekly, monthly, quarterly, or annually. Financial reports are prepared annually.

Emphasis

Cost accounting lays emphasis on ascertainment of cost and cost control. Financial accounts emphasis is laid on the recording of transactions and control aspect is not given importance.

Nature

Cost accounts lay emphasis on historical and predetermined costs. Financial accounts are maintained on the basis of historical records.

Related posts:
  1. Financial Accounting: Nature, Scope, and Objective
  2. Cost Accounting: Meaning, Functions, Scope, and Objectives
  3. Advantages and disadvantages of Financial Accounting
  4. Importance of Accounting Standards
  5. Nature & Scope of Accounting Standards
  6. Advantages and Disadvantages of Cost Accounting | with PDF
Categories Accountancy Tags distinction between cost accounting and financial accounting, distinguish between cost accounting and financial account, distinguish between cost accounting and financial accounting

Contents

  • Difference between Cost Accounts and Financial Accounts
    • Objective
    • Legal Requirement
    • Classification of Transactions 
    • Stock Valuation
    • Analysis of Profit and Cost 
    • Accounting period 
    • Emphasis
    • Nature

You may also like

  1. Financial Accounting: Nature, Scope, and Objective
  2. Cost Accounting: Meaning, Functions, Scope, and Objectives
  3. Advantages and disadvantages of Financial Accounting
  4. Importance of Accounting Standards
  5. Nature & Scope of Accounting Standards
  6. Advantages and Disadvantages of Cost Accounting | with PDF

Join Us On Social Media

About us

Commerce Mates is a free resource site that presents a collection of accounting, banking, business management, economics, finance, human resource, investment, marketing, and others.

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Management

  • Business Studies
  • Management
  • Business Environment
  • Human Resource Management
  • Business Ethics
  • Business communication
  • IT in Business
  • Marketing

Finance

  • Financial System
  • Financial Management
  • Investment
  • Economics
  • Goods and Services Tax
  • Insurance
  • Banking

Accountancy

  • Accountancy
  • Financial accounting
  • Management Accounting
  • cost accounting
  • Accounting Information
  • Accounting Standards
  • About
  • Disclaimer
  • Contact
  • Write for Us
  • Privacy
  • Sitemap
  • Copyright © 2018-23 CommerceMates
DMCA.com Protection Status

Add CommerceMates to your Homescreen!

Add