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Distinction between Financial accounting and Cost and Management accounting

S.No

Financial accounting

Cost and Management accounting

1

It is primarily for external purpose

It is primarily for internal purpose

2

It provides information about the financial performance and financial position of the business

It provides information of ascertainment of cost to control cost and for decision making about the cost.

3

It classified records, presents and interprets transaction in terms of money

It classifies, records, presents and interprets in a significant manner the material, labour and overheads cost

4

It shows the profit or loss of the organization

It provides the details of cost and profit of each product, process etc

5

Financial statements are prepared for a definite period, usually a year

Its reports and statements are prepared as and when required.

6

A set format is used for presenting financial information

There are not any set formats for presenting cost information.

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