MA9902C00 Study Guide - Final Guide: Cost Accounting, Standard Cost Accounting, Fixed Cost
Document Summary
Cost accounting is a branch of accounting that has evolved to overcome the limitations of financial accounting. It is the process of accounting for cost, which is concerned more with the ascertainment, allocation, distribution, and accounting aspects of cost. It is that branch of accounting, that deals with the classification, recording, allocation, summation, and reporting of current and prospective costs. It is the formal mechanism using which products and services are ascertained and controlled. Cost accounting is more concerned with short-term planning and its reporting period is many losses than financial accounting. It deals with historic data but is also futuristic in approach. Cost accounting systems cannot be installed without proper financial accounting systems. Each organization can develop a costing system best suited to its individual needs. It enables the management to ascertain the cost of product, job, contract, service, or unit of production to develop cost standards.
