Management accounting-pdf

management accounting-pdf
Download Document
Showing pages : 1 - 4 of 304
This preview has blurred sections. Sign up to view the full version! View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MANAGEMENT ACCOUNTING Study Material Prepared By INSTITUTE OF COST AND WORKS ACCOUNTANTS OF INDIA for Junior Accounts Officer(Civil) Examination Conducted By CONTROLLER GENERAL OF ACCOUNTS STUDY MATERIAL PREPARED BY ICWAI FOR J.A.O. (CIVIL) EXAMINATION 1 BASICS OF COST ACCOUNTING 1.0 Evolution of Cost Accounting, Cost Concepts and Cost Page . No Classification 1 1.1 Introduction 1 1.2 Evolution of Cost Accounting 2 1.3 Financial Accounting and Cost Accounting 3 1.4 Management Accounting 4 1.5 Financial, Cost and Management Accounting .5 1.6 Cost Concept and Cost Object 6 1.7 Cost Management 7 1.8 Cost Classification 10 1.9 Methods of Costing 12 1.10 Techniques of Costing 13 1.11 Specific Cost Systems 14 1.12 Cost Department and its relationship with other Departments 16 1.13 Installation of Costing System 17 Specimen Questions with Answers 18 Test Yourself 20 1.0 EVOLUTION OF COST ACCOUNTING, COST CONCEPTS AND COST CLASSIFICATION 1.1 INTRODUCTION Traditionally, cost accounting is considered as the technique and process of ascertaining costs of a given thing. In sixties, the definition of cost accounting was modified as the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and ascertainment of profitability of goods, or services. It includes the presentation of information derived therefrom for the purpose of managerial decision making. It clearly emphasises the importance of cost accountancy achieved during the period by using cost concepts in more and more areas and helping management to arrive at good STUDY MATERIAL PREPARED BY ICWAI FOR J.A.O. (CIVIL) EXAMINATION 2 Cost and Management Accounting business decisions. Today, the scope of cost accounting has enlarged to such an extent that it now refers to the collection and providing all sorts of information that assists the executives in fulfilling the organisational goals. Modern cost accounting is being termed as management accounting, since managers being the primary user of accounting information are increasingly using the data provided by the accounts, setting objectives and controlling the operations of the business. 1.2 EVOLUTION OF COST ACCOUNTING Accounting is a very old profession. Financial accounting is in use with the dawn of civilisation. As soon as counting and arithmetic started, and the use of money replaced the barter system, the financial accounting emerged in some form or other. However, cost accounting is traceable to the earlier part of the seventeenth century. The earliest reference of cost accounting can be found in Robert Loders farm accounts 161020. However, the industrial revolution in the 18th century brought about extensive mechanisation of production system resulting in large scale production. Some sporadic efforts were made in U.K. and U.S.A. to install factory cost systems as far back as 1805. But the concept of prime cost was used around 1875 by some industrialists. Between 1885 and 1901, a number of publications from London and New York industrialists....
View Full Document