ECONOMICS

Detailed explanation-1: -Purely Financial Charges: These are the expenses and losses which are shown only in financial accounts and do not form part of the production costs.

Detailed explanation-2: -Cost accounting is a form of managerial accounting that aims to capture a company’s total cost of production by assessing the variable costs of each step of production as well as fixed costs, such as a lease expense. Cost accounting is not GAAP-compliant, and can only be used for internal purposes.

Detailed explanation-3: -(2) Items shown only in Cost Accounts: There are some items which are recorded only in Cost Accounts but are not included in financial accounts, national interest on capital, notional rent of premises owned, salary to proprietor etc.

Detailed explanation-4: -Cost accounting is an internal instrument for the management to measure efficiency and make a decision related to the operations of a company. On the other hand, Financial accounting prepares financial statements to show performance to the entities external to the company like investors and creditors, etc.