COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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external reporting to investors, creditors, and government authorities
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cost planning and cost controls
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profitability analysis
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providing information for strategic and tactical decisions
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Detailed explanation-1: -Financial accounting is a branch of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use.
Detailed explanation-2: -Financial Accounting is primarily concerned with producing information for external users, including investors, creditors, customers, suppliers, government agencies, and labor unions. Financial accounting’s orientation is historical and is used for investment decisions.
Detailed explanation-3: -Financial accounting generates external financial statements, such as income statement, balance sheet, statement of cash flows, and statement of stockholders’ equity. An income statement reports a company’s profitability.
Detailed explanation-4: -Managerial accounting is concerned with external reporting, that is, reporting the results of economic activities to parties outside the firm.