Differences between financial accounting and cost accounting
Basis Financial Accounting Cost accounting
(i) Objective It provides information about the financial performance and financial position of the business.
It provides information of ascertainment of cost to control cost and for decision making about the cost.
(ii) Nature It classifies records, presents and interprets transactions in terms of money. It classifies, records, presents, and interprets in a significant manner the material, labour and overheads cost.
(iii) Recording It records Historical data. It also records and presents the of data estimated/budgeted data. It
makes use of both the historical costs and pre-determined costs.
(iv) Users of information The users of financial accounting statements are shareholders, creditors, financial analysts and government and its agencies, etc. The cost accounting information is used by internal management at different levels.

(v) Analysis of costs and profits It shows the profit/ loss of the organisation. It provides the details of cost and profit of each product, process,
job, contracts, etc.
(vi) Time period Financial Statements are prepared for a definite period, usually a year. Its reports and statements are prepared as and when required.
(vii) Presentation of information A set format is used for presenting financial information. There are not any set formats for presenting cost information.