cost accounting is a branch of accounting development to do away with with the limitations of financial accounting . Accounting system that maintain the record of financial transaction of a concern is called financial accounting .
Form the managerial point of view , the information provide by financial accounts is not sufficient . Therefore ,cost cost account was developed . In spite of its utilities and effectiveness , the financial accounting system has the following limitations :
1. Lack of cost analysis ,
2. Lack of profit analysis ,
3. Historical importance ,
4. Analysis the reasons of losses ,
5. proper measure of efficiency standard,
6. Inadequate for management ,
7. Lack of materials control ,
8. Determining of selling price ,
9. Analysis of labor cost ,
10. cost reduction .
Form the managerial point of view , the information provide by financial accounts is not sufficient . Therefore ,cost cost account was developed . In spite of its utilities and effectiveness , the financial accounting system has the following limitations :
1. Lack of cost analysis ,
2. Lack of profit analysis ,
3. Historical importance ,
4. Analysis the reasons of losses ,
5. proper measure of efficiency standard,
6. Inadequate for management ,
7. Lack of materials control ,
8. Determining of selling price ,
9. Analysis of labor cost ,
10. cost reduction .
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