Question Paper with answer
Management Accounting
PART-A
Q. 1. State three points of similarities between financial accounting and cost accounting.
Ans. Both financial and cost accounting are interdependent and their co-existence enables businesses to compute costs and sales realistically, properly and most importantly helps them to avoid loss
some of similarities are mentioned below
1 Reports
Financial accounting is used to produce reports that include financial statements, including the balance sheet, income statement and statement of cash flows. This information is given to external parties, such as stockholders, investors and lending institutions. With cost accounting, the documents produced through financial accounting are used by people within the company to make internal decisions. The use of financial statements is vital to both types of accounting. The difference lies in the groups of people that use the information.
2 Historical Data
Cost accountants and financial accountants both are interested in historical information about a company. This information is provided through financial statements. A primary reason that this information is important is to make future decisions for the company. With both types of accounting, future plans are created based on historical information. This includes forecasting, creating budgets and planning future projects.
3 Company Performance
Both financial accounting and cost accounting focus on ways to improve company performance. Financial accounting, however, concentrates on an entire company, while cost accounting generally divides performance by division, location or region. Financial accounting focuses on company performance by closely monitoring accounts payables and accounts receivables. Cost accounting also monitors performance issues by viewing these accounts and other data such as the cost of goods sold.
Q.2. Prepare a chart showing the different elements of cost.
Ans. Cost Accounting
Cost accounting
PART-A
Q. 1. State three points of similarities between financial accounting and cost accounting.
Ans. Both financial and cost accounting are interdependent and their co-existence enables businesses to compute costs and sales realistically, properly and most importantly helps them to avoid loss
some of similarities are mentioned below
1 Reports
Financial accounting is used to produce reports that include financial statements, including the balance sheet, income statement and statement of cash flows. This information is given to external parties, such as stockholders, investors and lending institutions. With cost accounting, the documents produced through financial accounting are used by people within the company to make internal decisions. The use of financial statements is vital to both types of accounting. The difference lies in the groups of people that use the information.
2 Historical Data
Cost accountants and financial accountants both are interested in historical information about a company. This information is provided through financial statements. A primary reason that this information is important is to make future decisions for the company. With both types of accounting, future plans are created based on historical information. This includes forecasting, creating budgets and planning future projects.
3 Company Performance
Both financial accounting and cost accounting focus on ways to improve company performance. Financial accounting, however, concentrates on an entire company, while cost accounting generally divides performance by division, location or region. Financial accounting focuses on company performance by closely monitoring accounts payables and accounts receivables. Cost accounting also monitors performance issues by viewing these accounts and other data such as the cost of goods sold.
Q.2. Prepare a chart showing the different elements of cost.
Ans. Cost Accounting
Cost accounting