|Preparation of financial statements of an organization to provide the financial information to the interested parties.
|Keeps track of various costs incurred in production activities
|Provides relevant information to the managers to make policies, plans and strategies for running the business effectively.
|Material, labour and overhead
|To determine the cost of production and control the cost
|To assist the management by supplying necessary accounting information
|Not broad, deals primarily with cost
|Prepare profit & loss account and balance sheet for reporting to owners or shareholders or outside agencies
|To provide detailed cost information to management – internal users
|Only historical data
|Past as well as present facts and predetermined figures
|Relating to the future.
|Should be prepared according to the legal requirements of Companies Act and Income Tax Act.
|Voluntary except in certain industries.
|No such principle
|Reveals profit and loss of the business as a whole – does not show figures of cost and profit for individual products or departments.
|Shows detailed cost and profit data for each product line or department etc.
|Periodical process – usually annually.
|Continuous process – may be daily, weekly, monthly etc.
|As per the needs
|Internal and external
|No control function – only recording and reporting
|Involves controlling aspects.
|Concerned with only historical records
|Concerned with historical as well as current data
|Types of transactions
|Only external transactions
|External as well as internal
|Types of statements prepared
|P&L account, balance sheet etc
|Idle time report, variance report etc.
|Measures the overall performance of organization
|Performance of various departments and divisions
|Publishing and auditing
|Required to be published and audited
|Neither published nor audited
August 13, 2020