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Explain the difference between costing and cost accounting?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 rohith asked almost 3 years ago

Hi, Explain about the difference between costing and cost accounting?

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7 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

Product costs. Cost accounting compiles the cost of raw materials, work-in-process, and finished goods inventory, while financial accounting incorporates this information into its financial reports (primarily into the balance sheet).

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 prashanth answered over 2 years ago

costing is the process of ascertainment of cost and cost accoutning is the application of cost accounting principles to costing.i think this is the major difference between costing and cost accounting.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

Cost: Cost is commonly defined as ‘sacrificed resource’ for a particular thing. If we buy a watch for $30, the amount of dollars is considered to be the cost of that watch. Here, 30 dollars are sacrificed to obtain a watch. It is the simplest example but cost can be of anything which is measurable in terms of money. For example, cost of preparing one pizza which in itself include various other costs like cost of flour, other ingredients, labor, electricity and other overheads. Just the same way, cost of production of any product or service can be determined. Costing: ‘Cost’ is a term whereas ‘Costing’ is a process for determining the cost. It may be called a technique for ascertaining cost of production of any product or service in business organization. The real scope of this term can best be understood in the context of big manufacturing concerns who produce hundreds of products and spend lot of money on material, labor and other overheads. Cost of each product in those organizations requires recording expenses with to each product or process, classifying expenses like direct material, labor, overheads etc, allocating direct expenses and suitable apportionment of overheads to each product for most correct determination of per unit cost of production of each product.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 prashanth answered over 2 years ago

costing is the process of ascertainment of cost. cost accounting is the application of cost accounting principles to costiing

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

Format. The reports prepared under financial accounting are highly specific in their format and content, as mandated by either generally accepted accounting principles or international financial reporting standards. Cost accounting involves creating reports that can be in any format specified by management, with the intention of including only that information pertinent to a specific decision or situation.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered almost 3 years ago

Cost, costing, cost accounting and cost accountancy are normally used interchangeably but they are not synonyms of each other. The meaning of these terms is related and similar but there are differences. Cost is a sacrificed resource to obtain something, costing is a process of determining costs, cost accounting is a technique to assist management in establishing various budgets, standards, etc and cost accountancy is the practice of costing and cost accounting. Cost: Cost is commonly defined as ‘sacrificed resource’ for a particular thing. If we buy a watch for $30, the amount of dollars is considered to be the cost of that watch. Here, 30 dollars are sacrificed to obtain a watch. It is the simplest example but cost can be of anything which is measurable in terms of money. For example, cost of preparing one pizza which in itself include various other costs like cost of flour, other ingredients, labor, electricity and other overheads. Just the same way, cost of production of any product or service can be determined. Costing: ‘Cost’ is a term whereas ‘Costing’ is a process for determining the cost. It may be called a technique for ascertaining cost of production of any product or service in business organization. The real scope of this term can best be understood in the context of big manufacturing concerns who produce hundreds of products and spend lot of money on material, labor and other overheads. Cost of each product in those organizations requires recording expenses with to each product or process, classifying expenses like direct material, labor, overheads etc, allocating direct expenses and suitable apportionment of overheads to each product for most correct determination of per unit cost of production of each product. Cost Accounting: This term is of utmost importance for the top management of any business. Cost Accounting is basically the next step to costing. Cost accounting involves analyzing relevant costing data, interpret it and present various management problems to management. The scope of cost accounting involves preparation of various budgets for an organization, determining standard costs based on technical estimates, finding and comparing with actual costs, ascertaining the reasons of by variance analysis etc. Cost Accountancy: This term is over and above costing and cost accounting. It envisages application of costing and cost accounting in a business setup. Cost Accountancy facilitates management with cost control initiatives, ascertainment of profitability and informed decision making. It also includes determination of selling price for the products, division and unit wise profitability. Forecasting of expenses and future probable incomes is also a part of the practice of Cost Accountancy.

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Picsjoin 2017224123730582 Archana answered almost 3 years ago

Hie Rohith, 1. Audience. Financial accounting involves the preparation of a standard set of reports for an outside audience, which may include investors, creditors, credit rating agencies, and regulatory agencies. Cost accounting involves the preparation of a broad range of reports that management needs to run a business. 2. Format. The reports prepared under financial accounting are highly specific in their format and content, as mandated by either generally accepted accounting principles or international financial reporting standards. Cost accounting involves creating reports that can be in any format specified by management, with the intention of including only that information pertinent to a specific decision or situation. 3. Level of detail. Financial accounting primarily focuses on reporting the results and financial position of an entire business entity. Cost accounting usually results in reports at a much higher level of detail within the company, such as for individual products, product lines, geographical areas, customers, or subsidiaries. 4 Product costs. Cost accounting compiles the cost of raw materials, work-in-process, and finished goods inventory, while financial accounting incorporates this information into its financial reports (primarily into the balance sheet). 5 Regulatory framework. The structure of financial accounting reports are tightly governed by either generally accepted accounting principles or international financial reporting standards. There is no regulatory framework governing cost accounting reports. 6 Report content. A financial report contains an aggregation of the financial information recorded through the accounting system. The information in a cost accounting report can contain both financial information and operational information. The operational information can come from a variety of sources that are not under the direct control of the accounting department. 7 Report timing. Financial accounting personnel issue reports only at the end of a reporting period. Cost accounting staff may issue reports at any time and with any degree of frequency, depending upon management's need for the information. 8 Time horizon. Financial accounting is only concerned with reporting the results of reporting periods that have already been completed. Cost accounting does this too, but also can be involved in a variety of projections for future periods.

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