I

NTRODUCTI
ONTOCOSTACCOUNTI
NG

COST.i
sthevalueofeconomicr
esourcesusedasaresul
tofproduci
ngi
tems.Al
sodef
inedas
amountofexpendi
tur
eincur
redorat
tr
ibutedtoaspeci
fi
edacti
vit
y

COSTACCOUNTING -
iti
stheappli
cati
onofaccounti
ngandcost
ingt
echni
ques,
pri
nci
plesand
methodi
nascer
tai
nmentofcostanal
ysisofsavi
ngs

Costcont
roli
nvol
vesr
educt
ionofcostt
oami
nimum possi
blel
evel
.

SI
MILARI
TIESBETWEENCOSTACCOUNTI
NGANDFI
NANCI
ALACCOUNTI
NG

1.Theaccur
acyofaccountcanonl
ybeappr
ovedi
fbot
hsyst
emsar
eappl
ied

2.Thef
undament
alpr
ici
nci
pleofdoubl
eent
ryi
sappl
icabl
etobot
hsyst
em ofaccount
ing.

3.I
nvoicesandvoucher
sar
ethecommonbasi
sforr
ecor
dingt
ransact
ionunderbot
hsyst
em
ofaccounts

4.Ther
esul
tsofbusi
nessr
eveal
edundersyst
em ofaccount
ingmustal
waysbeequal
ly

5.Theybot
hdet
ermi
nef
utur
epol
icyandsyst
em t
obeusedi
naccount
ing

Di
ff
erencebet
weenf
inanci
alaccount
ingandcostaccount
ing

FI
NANCI
ALACCOUNTI
NG COSTACCOUNTI
NG

Usedforext
ernalr
epor
ti
ngtot
heowned, Usedfori
nter
nalr
eport
ingt
othe
cr
edit
orsandgovernment managementforf
utur
edeci
sionmaki
ng

Recor
dshi
stor
ical
costonl
y Recor
dsbot
hhi
stor
icalandest
imat
edcodt

Recordt
ransact
ioninasubject
ivemanner Recor
dt r
ansact
ioni
nanobjecti
vemanner
basi
ngont henatur
eofexpendi
ture accor
dingtopur
poseofcostaccount
ing

Pr
oducegener
alpur
posef
inanci
alst
atement Pr
oducespeci
alst
atementandr
epor
t

Provi
deaccount
ingdat
ainmonet
aryt
erms Provi
deaccounti
ngdat
ainbot
hmonet
aryand
only nonmonetaryter
ms

Mustconfom t
ogeneral
lyaccept
ed Mustconf
ormt
oinf
ormat
ionneedof
account
ingpr
inci
ple managent

ESSENTI
ALOFANEFFECTI
VECOSTACCOUNTI
NG

1.Ther
emustbepr
opersyst
em ofwagepayment

2.Ther
emustbeapr
operpr
opersyst
em ofst
oresandst
ockcont
rol
3.Thedut
iesandr
esponsi
bil
it
yofcostaccount
antmustbecl
eart
ounder
stand

4.Acostaccount
ingdepar
tmentshoul
dbeest
abl
ishedt
odealwi
thcost
s.

5.Theover
headmustber
ecor
dedaccur
atel
yandchar
gedt
orespect
ivedepar
tment

DUTI
ESOFCOSTACCOUNTANT

1.Ascer
tai
nthecostofever
ypr
oductj
oborser
vicesi
nter
msofpr
oduct
ion

2.I
mpl
ementt
hecostcont
rol
techni
quesuchasbudget
ingandaudi
ti
ng

3.Pr
epar
ati
onofper
iodi
ccostandpr
ofi
tst
atement
s

4.Undert
akecostaudi
tandst
ockt
aki
ngagr
eedaspert
hedi
rect
ivesoft
hegover
nmentand
author
it
y

5.Coordi
nat
ewi
thvar
iousdepar
tmentmanager
ssoast
oimpl
ementcostr
educt
ion
progr
ammeandmethodofimprovement

PURPOSEOFCOSTACCOUNTI
NG

1.Hel
psi
npl
anni
ngofcostandcompar
ingwhati
spl
annedandact
ualr
esul
ts

2.Hel
pst
opr
ovi
det
hecosti
nfor
mat
ionnecessar
yforr
eal
ist
icst
ockval
uat
ion

3.Helpstoi
ndi
cat
etheexactcauseofi
ncr
easeanddecr
easei
npr
ofi
tshownbyt
hef
inanci
al
accounts

4.COSTASCERTAINMENT- thecostofpr
oduci
ngdif
fer
entgoodsandser
vicesmustbe
ascer
tai
nedaccur
atel
y.Thi
scostincl
udemater
ial
costandoverheads

5.EVALUATUONOFPROFI TABI
LITY-
cost
ingpr
ovi
desi
nfor
mat
ionf
oreval
uat
ingpr
ofi
tabi
li
ty
ofanacti
vit
ydepar
tment

6.Pr
ici
ngofproduct
sandpr oj
ect
sandt hi
sinvolvesdet
ermi
nati
onofpri
cesofnewproduct
s
adj
ustmenti
npriceofexi
sti
ngproduct
saswel lasdeter
minat
ionofbi
dpricesf
orcont
ract
s