COST ACCOUNTING FINANCIAL ACCOUNTING
Cost Accounting is an
accounting system,
through which an
organization keeps the
track of various costs
incurred in the business in
production activities.
Records the information
related to material, labor
and overhead, which are
used in the production
process.
Both historical and pre-
determined cost
Information provided by
the cost accounting is used
only by the internal
management of the
organization like
employees, directors,
managers, supervisors etc.
At cost
No, except for
manufacturing firms it is
mandatory.
Details provided by cost
accounting are frequently
prepared and reported to
the management.
Generally, the profit is
analyzed for a particular
product, job, batch or
process.
Reducing and controlling
costs.
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.
Only historical cost.
Users of information provided
by the financial accounting
are internal and external
parties like creditors,
shareholders, customers etc.
Cost or Net Realizable Value,
whichever is less.
Yes for all firms.
Financial statements are
reported at the end of the
accounting period, which is
normally 1 year.
Income, expenditure and
profit are analyzed together
for a particular period of the
whole entity.
Keeping complete record of
the financial transactions.
COST ACCOUNTING FINANCIAL ACCOUNTING
Forecasting is possible Forecasting is not at all
through budgeting possible.
techniques.
Financial Accounting Cost Accounting
Records and summarizes cost
Records financial data
information and data. This
of the organization.
includes information about
So it records all
labour, materials and various
relevant monetary
overheads of the manufacturing
data
process.
Financial accounting Cost accounting uses both
only deals in historical historical and pre-determined
costs (only actual costs (standard costs, estimates
costs and figures) etc.)
The users of the
information provided Information provided by cost
by financial accounting is only meant for
accounting are both people within the firm like
internal and external management, employees etc.
users
Financial accounting
is mandatory for all
firms. Every Cost accounting is only done by
organization has to manufacturing firms. And in
keep some record of most cases, it is not mandatory.
its financial
transactions
The emphasis here is Other than recording data it also
on recording the provides a system of cost control
transactions/data and of labour, material, overhead
presenting it in the costs
given format.

Financial accounts
deal with the business
Costing will enable us to get the
in its entirety. So it
profit or loss for individual
provides us with
products, process, job etc.
profit or loss for the
whole concern

In financial
accounting, there is
no aspect of In Cost accounting, forecasting is
forecasting. It is possible using some of the
simply a record of the budgeting techniques
financial position of
the firm

Financial accounting
is strictly a positive
science. There is Cost accounting is both a
rigidity in the process positive and normative science.
due to legal
requirements