DIFFERENCE BETWEEN FINANCIAL ACCOUNTING AND COST ACCOUNTING

Difference between Financial Accounting and Cost Accounting

	Basis	Financial Accounting	Cost Accounting
(i)	Objective	Providing information about the financial performance of an entity.	Ascertainment of cost for the purpose of cost control and decision making.
(ii)	Nature	It classifies records, present and interprets transactions in monetary terms.	It classifies costs, records, present, and interprets it in a significant manner.
(iii)	Recording of data	It records Historical data.	It makes use of both historical and pre-determined costs.
(iv)	Users of information	The users of financial accounting statements are shareholders,                                  creditors, financial analysts and government and its agencies, etc.	The cost accounting information is generally used by  internal   management. But some time regulatory authorities also.
(v)	Analysis of cost and profit	It shows profit or loss of the organization either segment wise or as a whole.	It provides the cost details for each cost object i.e. product, process, job, contracts, etc.
(vi)	Time period	Financial     Statements     are prepared usually for a year.	Reports   and    statements are prepared as and when required.
(vii)	Presentation of information	A    set    format    is    used for presenting financial information.	In general, no set formats for presenting cost information is followed.