1. WEL – COME
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2. Lecture On : Cost accounting
Presented By : Assist. Prof. Bhagwat A.B.
Dept. of Commerce
S. M. Joshi College, Hadapsar, pune-28
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3. INTRODUCTION
Accounting is the language of the business. It communicate the results of the business units to the concerried parties.
The main objective of any business activity is to earn profit. Each business is making profit or not.
He knows the results of his business by preparing the a/cs of his business transactions. Whenever an economic transaction takes place, an accounting takes place.
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4. So, generally the accounting is related to financial transactions and it is called as financial accounting.
During a long period of time, the nature of business went on changing, therefore the needs of mgt. Also changed.
As a result of that accounting also developed. Due to the limitations of financial accounting, a cost accounting comes into existence and to overcome the limitations of cost accounting, a mgt. Accounting is developed.
Cost accounting & management accounting are the branches of accounting, which are recently developed.
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5. Meaning of cost accounting
According to Wheldon, “Cost acounting is the application of accounting and costing principles, methods and techniques in the ascertainment of costs and the analysis of saving or excess cost incurred as compared with previous experience or with standards.”
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6. Objects of Cost Accounting :- 1) Cost ascertainment 2) Cost analysis
3) Determination of Selling price
4) Ascertainment of profitability
5) Cost control
6) Cost reduction
7) Preparation of reports
8) Providing base for decisions
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7. Limitations of Cost Accounting :-
Advantages of Cost Accounting.
Limitations of Cost Accounting :-
1) Lack of uniformity
2) Large number of conventions, estimates and other flexible factors.
3) Expensive
4) Not suitable
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8. Summary
Cost accounting and management accounting are the developed branches of accounting. Cost accounting is the process of classifying, recording and appropriate allocation of expenditure for the determinationof the total of a product or service.
The main objectives of cost accounting are ascertainment of cost, cost control, cost reduction, determining the selling price, controlling the efficiency and providing useful basis for operating policy of the business.
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9. Cost accounting is developed to help the management.
Management with the help of cost accounting, can find out total cost as well as per unit cost, control and reduce the cost accounting, it suffers from some limitations such as lack of uniformity, large number of conventions, estimates and other flexible factors, expensive nature etc.
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