Essay on Advantages and Disadvantages of Concepts

3829 Words May 9th, 2012 16 Pages
CURRENT COST ACCOUNTING METHODS – CHALLENGE FOR ACCOUNTING PROFESSION
Livia RAC, dr Györgyi PETKOVICS University of Novi Sad, Faculty of Economics, Subotica, Serbia liviar@eccf.su.ac.yu, pegy@eccf.su.ac.yu Abstract / Abstrakt In its existence, cost accounting, as main part of management accounting, is continuously changing. Economic realities have made it necessary for most companies to have organizational changes as well as cost reduction. Markets have become global with competitors offering high-quality, low-cost goods and services. Speed, accuracy as well as understanding and meeting consumers’ needs come in front. The proliferation of products and services adds to the complexity of getting work done throughout an organization. This
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Accounting can be divided into two groups: financial accounting and managerial accounting. Financial accounting has external orientation; its aim is to meet the informational needs of external stakeholders. Financial accounting’s subject of observation is company’s cash-flow, and transactions’ recording refers to the entire company. Near financial accounting, because of different information needs of internal stakeholders (owner, manager, and staff), a managerial accounting is developed which also collects, classifies and summarizes business-financial data as well as prepares and presents reports. Managerial accounting does it only for the managers. Cost accounting, as central and the oldest part of managerial accounting is a set of principles, methods and procedures of defining cost, revenue and result information, and means providing these information for internal stakeholders. Cost accounting has internal orientation, thus it is in tune with management structure’s requirements. 745

This work aim is to give a short description of costing systems, which are used by companies today. While there are new costing concepts, we have to mention the traditional ones also, because many business organizations still use only traditional costing system.

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DEVELOPMENT OF COST-ACCOUNTING Cost accounting as a part of accounting has relatively long past. It has existed since the first decade of 1800. During its life

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