Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 12

Accounting is the process of recording, reporting, and analyzing business transactions. It’s the written record of a business. Cost accounting is the process of capturing all the costs of “production,” whether a business manufactures products, delivers services, or sells retail items. Cost accounting is used for all types of businesses.

Often, cost accounting overlaps with other types of accounting, such as financial accounting and management accounting. If you have some knowledge about these other areas of accounting, that background can help you understand cost accounting. If not, no big deal. This section helps clarify what cost accounting is, how it’s used, and how these accounting methods relate.

Financial accounting is a reporting process. An accountant reports on the financial position of a firm and the firm’s performance by creating financial statements. The statements are mainly used by external (outside) parties to show how the company is doing. External parties include shareholders, creditors, and regulators.

The external parties may not have an accounting background, so there are many rules of the road (and they are very specific) for creating financial statements. The rules exist so that each set of financial statements is standardized. If all companies follow the same set of rules to create financial statements, the information is usually comparable.

Financial accounting looks backward. It’s retrospective. The accountant is creating financial statements for transactions that have already happened. So unlike cost accounting, financial accounting doesn’t provide any planning or forecasting.

Your external users want financial statements on a periodic basis. Companies typically issue financial statements on a bi-annual, or annual basis. External users want to know how you’re doing — for a variety of reasons.