Podcast
Questions and Answers
Financial accounting and cost accounting systems in a business both record the same basic data for income and expenditure, but each set of records may analyse the data in a different way. This is because each system has a different ______.
Financial accounting and cost accounting systems in a business both record the same basic data for income and expenditure, but each set of records may analyse the data in a different way. This is because each system has a different ______.
purpose
Financial accounts are usually prepared for stakeholders external to an organisation, eg shareholders, banks, customers, suppliers, HM Revenue and Customs and ______.
Financial accounts are usually prepared for stakeholders external to an organisation, eg shareholders, banks, customers, suppliers, HM Revenue and Customs and ______.
employees
Management accounts are usually prepared for internal ______ of an organisation.
Management accounts are usually prepared for internal ______ of an organisation.
managers
Financial accounts detail the performance of an organisation over a defined period, including its cash flows and the state of affairs at the end of that ______.
Financial accounts detail the performance of an organisation over a defined period, including its cash flows and the state of affairs at the end of that ______.
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Management accounts are used to aid ______.
Management accounts are used to aid ______.
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Which set of records is usually prepared for internal managers of an organization?
Which set of records is usually prepared for internal managers of an organization?
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What type of accounts are usually prepared for stakeholders external to an organization?
What type of accounts are usually prepared for stakeholders external to an organization?
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What type of accounts detail the performance of an organization over a defined period, including its cash flows and the state of affairs at the end of that period?
What type of accounts detail the performance of an organization over a defined period, including its cash flows and the state of affairs at the end of that period?
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Why do financial accounting and cost accounting systems in a business analyze data differently?
Why do financial accounting and cost accounting systems in a business analyze data differently?
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What is the main difference between financial accounts and management accounts?
What is the main difference between financial accounts and management accounts?
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Study Notes
Comparison of Financial Accounting and Cost Accounting
- Financial accounting and cost accounting systems record the same basic data for income and expenditure.
- Each system analyzes the data differently because they have different purposes.
- Financial accounts are prepared for external stakeholders such as shareholders, banks, customers, suppliers, and tax authorities.
- Management accounts are prepared for internal managers of an organization.
- Both financial accounts and management accounts use the same data.
- Differences between financial accounts and management accounts arise from the way the data is analyzed.
- Financial accounts provide details of an organization's performance over a specific period, including cash flows and the financial position at the end of that period.
- Management accounts are used to assist managers in making decisions and planning.
- Financial accounts are prepared for stakeholders external to the organization.
- Management accounts are prepared for internal use by managers.
- Financial accounts are used by shareholders, banks, customers, suppliers, tax authorities, and employees.
- Management accounts are used by internal managers to aid in decision-making.
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Description
Test your knowledge on the differences between financial accounting and cost accounting. Understand how each system analyzes income and expenditure data and their distinct purposes. Perfect for those studying or working in the field of accounting.
