Difference Among / Between Financial Accounting, Cost Accounting And Management Accounting Or Managerial Accounting With Relationship

Financial Accounting is concerned with the financial performance and financial position of the business. Cost Accounting is the study of cost of units production or service. Managerial Accounting or Management Accounting is related with the decision making process in order to use the resources efficiently to get better financial performance and financial position of the business.

The person involves in financial accounting is called Financial Accountant who prepares Books of Accounts of the company’s business. Cost Accountant is the one who prepares cost of each unit production or service. In a company, Management or Managers are done the works of Managerial Accounting for better decision making process. They manage the financial activities and cost of productions or service to get better results from the available resources with minimum cost.

Under financial accounting, Financial Statements are prepared which are reported to Users of Financial Statements. The cost data computed for productions and operations are reported to Management which decides what to do better to minimize costs to gain profits from available quality products or services.

Relationship Among / Between Financial Accounting, Cost Accounting And Management accounting Or Managerial Accounting 

There is a strong relationship existed among financial accounting, cost accounting and managerial accounting. For Example, financial performance, financial position and units cost of production or service of the business can be made effective with the help of effective management decisions i.e., in order to produce products or service with minimum cost so that the company earns profits and get better financial position, the management accounting plays an important role in deciding which policy should be implemented in order to get better financial results from available resources.

When the company earns Profits, then some portion of this profits is utilized for business matters in order to Stabilize the Business and hence as a result manufacturing company continue its business to produce goods or render services to its customers. This is possible only if it is managed by effective management which works on various projects to run the business effectively and efficiently.