If Accounting Is Defined As The Collection, Recording And Analysing Of Financial Data To Suit Decision That Needs To Be Taken. What Is Cost Accounting?

The terms 'costing' and 'cost accounting' are often use interchangeably The Chartered Institute of Management Accountants (CMA) London has defined costing as "the classifying recording and appropriate allocation of expenditure for the determination of costs, the relation of these costs to sales value and the ascertainment of profitability". Thus, costing simply means cost finding by any process or technique. It consists of principles and rules which are used for determining: the cost of manufacturing a products; e.g. chemical, television, steel, paper, etc, and the cost of providing a service; e.g., electricity, transport, etc.
Cost accounting on the other hand is a formal system of accounting for costs in the books of account by means of which costs of products and services are ascertained and controlled. An authoritative definition of cost accounting has been given by CIMA London as follows: " Cost accounting is the process of accounting for costs from the point at which expenditure is incurred or committed to the establishment of its ultimate relationship with cost centers and cost units. In its widest usage, it embraces the preparation of statistical data, the application of cost control methods and ascertainment of profitability of activities carried out or planned".

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