Before we begin to distinguish between financial and cost accounting, we need to know what the two terms really are. Since both terms are defined, they are automatically distinguished.
Financial Accounting is a regular way of preparing financial statements for an organization in order to make a true and fair view of profit or loss. These financial statements are organized for decision makers, shareholders, bankers, suppliers, shareholders, government agencies and other holders. An essential requirement to prepare a financial statement is to examine and reduce fishing costs by measuring the cost and income status and reporting the results to interested users. These statements are organized for outsiders who are not involved in daily organizational activities.
It is easy to say that "financial accounting is the process that involves recording, interpreting and summary date from the financial records of the organization and the fact that the annual report serves the benefit of people outside the organization".
Deep financial accounting includes some principles, concepts and equations.
Financial Accountants organize financial statements based on accounting principles that a country generally accepts. The financial statements are prepared in accordance with International Financial Reporting Standards (I FRS).
Accounting Equation: (ASSETS = OBLIGATIONS + ENTERPRISES EQUITY).
2. General Diary.
3. General Book.
4. Cash Book.
5. Trail Balance.
6. Trading Profit and Loss Account.
7. Libra. Cash flow statement.
First, transaction transactions and must be noted in the form Voucher. Each transaction is available in a voucher. Then a special form is created, called General Journal. All transactions are recorded in one form. The next step is Calling Aiming, where all separate headings / accounts are individually recorded in various forms / accounts as general accounts. We keep the cash book for records and recipes and for the organization. With the Ledger Secretary General, Trail Balance has been drawn up, including the elements of the trading, profit and loss statement and balance sheet showing the financial position and health of the organization. And finally, the cash flow statement is ready to lead to accrual-based inflow and cash outflow.
Costs determine budget and actual production costs, operations, departments, processes, and variance analysis. Cost accounting helps support decision-making in order to reduce organizational costs and improve profitability. Cost accounting does not require standards (GAAP) as generally accepted accounting principles, as its primary purpose is to use internal management instead of outsiders. Some of the administrative accounting approaches are as follows;
• Driving cost reimbursement.
• Activity Based Costing.
• Standard Cost Accounting.
• Resource Consumption Accounting.
Three Classical Cost Elements:
• Raw Material.
• Factory Over Head / Indirect Costs.
Cost Accounting is used to help managers understand and reduce the organization's operating costs. Most of the costs are the variable rate of change in production costs, such as money spent on labor, the power of the factory, direct material, etc. Probably does not change. Probably variable costs, some costs remain the same during the busy period or during null production. These costs are called "Fixed Costs" such as depreciation of assets, leasing of buildings, etc.
Some statements are made during cost accounting. The chief executives are: income statement, selling costs of sales and production report costs.
The income statement is ready to lead the organization's net income / profit. All direct costs associated with the purchase of goods / materials in the process are less than Payments, and the amount retained is called gross profits. Subsequently, all indirect costs related to sales, administration and financial costs are deducted (GP) from gross profits, deducted deduction (NP) net profit / income.
(CGS) Cost of goods sold:
The cost of goods sold implements the total cost of selling finished products. During the preparation, the first Martial Martial Art was expanded by purchasing Martial Martial Arts last year, called "All Usable Materials" and deducting the used material. The remaining amount is called "Consumable Cost of Materials". Then Labor and (FOH) Factory Overhead costs added to the cost of materials used. The total amount of this amount is called "Total Operating Cost" after adding the workload in progress and terminating the work in progress from Total Factory Cost. The amount subsequently driven is the so-called "cost of manufactured goods". Finally, the end-product of the finished product is added and the final stock of the finished product is deducted from the cost of the goods and the amount of the respondent "(CGS)"
(Direct labor + direct labor = primary cost) (Labor + FOH = cost]
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