Accounting for Business Meaning And Scope Of Cost...

ACCOUNTING FOR BUSINESS II CHAPTER 1 COST SHEET Meaning And Scope of Cost Accountancy The term cost accountancy is wider than the term cost accounting. According to the Terminology of Management and Financial Accountancy Published by the Chartered Institute of Management Accountants, London, cost accountancy means, â€Å"the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control. It includes the presentation of information derived there from for the purpose of managerial decision making. Cost Accounting Cost accounting is the process of accounting for costs. It embraces the accounting procedures relating to recording of all income and expenditure and the†¦show more content†¦As a matter of fact cost management is often invariably linked with revenue and profit planning. For instance, to enhance revenue and profits, the management often deliberately incurs additional costs for advertising and product modifications. 6. Ascertaining Profits: - Cost accounting also aims at ascertaining the profits of each and every activity. It produces statements at such intervals as the management may require. The financial statements prepared under financial accounting, generally once a year or half – year, are spaced too far apart in time to meet the needs of the management. In order to operate the business at a high level of efficiency, it is essential for the management to have a frequent review of production, sales and operating results. Cost accounting provides daily, weekly or monthly volumes of units produced, accumulated costs together with appropriate analysis so that quantum of profit and profitability is known. 7. Providing Basis for Managerial Decision – Making: - Costs accounting helps the management in formulation operative policies. These policies may relate to any of the following matters:- (i) Determination of cost – volume – profit relationship. (ii) Shutting down or operating at a loss. (iii) Making or buying from outside supplies. (iv) Continuing with the existing plant and machinery or replacing them by improved and economical means. Cost Accounting Versus Financial Accounting Accounting may broadly be classified intoShow MoreRelatedFghgfhgfh3698 Words   |  15 PagesCourse –I (ELC) Core Course I (CC) Principles of Accountancy Core Course II (CC) Practical Banking Allied Course I Business Management Language Course –II (LC) – Tamil*/Other Language +# Total II I II III 6 6 5 5 4 2 2 30 3 3 3 3 3 3 3 25 25 25 25 25 25 25 75 75 75 75 75 75 75 100 100 100 100 100 100 100 700 IV IV Total English Language Course –II (ELC) Core Course III (CC) Business Mathematics and Statistics Allied Course II Business Economics Allied Course III Marketing EnvironmentalRead MoreAuditor Independence - 21972 Words   |  8 Pagesboth independent and seen to be so. 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