Ateneo de Zamboanga University
School of Management and Accountancy
Accountancy Department
LEARNING PACKET
LEARNING PACKET 1
TOPIC: Introduction to Cost Accounting
I. CONCEPT NOTES
Purpose of Accounting?
-to provide financial information about an economic entity to different types of users
Cost Accounting
•It is the intersection between financial and management accounting because it addresses
informational demands of both financial and management accounting by providing information
to external and internal parties.
Relationship with Financial accounting - Inventory Valuation (production of units render cost, and cost
accounting gives financial information about costs related to production of a product)
Relationship with Managerial accounting - Decision making (costs incurred can be used for projection in
budgeting and forecasting, for pricing decisions, performance evaluation, and other management-
related tasks)
Interrelationship between the three disciplines:
•Cost information collected will be recorded in the journals, and these costs are used to plan and
decide for future prospects by managers
•To better use the cost information, managers should strategize on how to use capabilities and
opportunities to accomplish its objectives-thus the birth of strategic cost management
Strategic Cost Management
•Describes cost management that specifically focuses on strategic issues
Users
Internal
External
Investors
Creditors
Government
Others
Board of
Directors
Managers
Employees
Financial
Accounting
Managerial
Accounting
Comparison
Managerial Accounting
Financial Accounting
•Primary Users are internal
•Focus is future prospects
•Purpose is to help managers and owners make
decision to fulfill organization’s goals
•Information is both financial and non-financial
in nature
•No standards required to be followed
•Primary Users are external
•Focus is historical information
•Purpose is to communicate the financial
position and performance of a company
•Information is mostly financial in nature
•Uses standards (IFRS, GAAP) that is required
to be followed
