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accounting, primarily aims at meeting the extends far beyond manufacturing,
information needs of external stakeholders permeating through the fabric of modern
of a business. While, financial accounting organisational frameworks, where its
it is not strictly guided by accounting analytical insights play a pivotal role in
standards (e.g., IFRS) but a variety of fostering efficiency, profitability, and
cost accounting principles. It is mainly used strategic growth.
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by managements of the organisations to Management accounting: It works
achieve the objectives of controlling and closely with cost accounting, uses many of
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reducing of costs in the production of the same methods and techniques to process
goods and services. In other words, cost data. But it is even broader because it looks
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accounting information is generally meant at more types of data, and how they are used.
for management consumption that is internal Besides just money stuff, like how much a
use of accounting information. company spends, management accounting
Cost accounting: In its nascent stages, also thinks about other important things
was predominantly moulded to be utilised like how well its marketing is working
within manufacturing enterprises. Initially and how happy its employees are. Unlike
conceived to meticulously document and cost accounting, which has strict rules to
dissect manufacturing expenditures, its follow, management accounting makes
principal aim resided in delineating the companies be more flexible when they make
precise costs associated with the creation of reports, like budgets and other important
products. However, as business landscapes documents. These reports are made to fit
evolved, the purview of cost accounting what the managers need, and they can
transcended its traditional confines be done in different ways as long as they
and found applicability across diverse are good quality. This is different from
organisational domains, encompassing financial accounting, where reports have
service-oriented establishments as well. to follow specific rules and principles set
This evolution reflects a paradigm shift in by accounting standards.
the conceptualisation of cost accounting, Recently, there are new types of accounting
transitioning from its previous role solely that have emerged, alongside the other
within the manufacturing sphere to a more types mentioned earlier. These include tax
expansive role catering to the intricacies of accounting, forensic accounting, and social
various service-providing entities. Today, responsibility accounting.
cost accounting serves as an indispensable
tool for elucidating the financial intricacies Activity 1.1
inherent in service-based operations, Read from various sources including
enabling organisations to ascertain the true online sources on the meaning and
cost structures underpinning their services importance of tax accounting, forensic
and facilitating informed decision-making accounting, and social responsibility
processes. Thus, its contemporary relevance accounting.
Student’s Book Form Five
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