Definitions of cost accounting and managerial problems Posted by birendra kunwar on 3:25 AM

Cost accounting is accounting for cost . It is made of two words-cost and accounting. The terms cost denotes the total of all expenditures involved in the process of production. Thus , it covers the costs involved production and cost involved while receiving it. Accounting on the other hand ,collects and maintains financials record of each income and expenditures and make avail of such information to the concerned officials. Thus cost accounting is a practice and process of cost which determines the profitability of a business concern by controlling the cost with the application of accounting principle, process and rules.

Cost accounting includes the presentation of information derived there from for purposes of managerial decision making . Thus cost accounting is an art as well as science . It is science because it is a body systematic knowledge having certain principles which a cost account should possess for proper discharge his responsibilities . It is an art as it requires the ability and skill with which a cost account is able to apply the principles of cost accounting to various managerial problems . Practices include the continuous effort of a cost account in the field of cost accountancy . Such efforts also include the presentation of information for the purpose of managerial decision making and keeping statistical records.