Students gain a solid working knowledge of accounting and information systems, and learn to use quantitative analysis techniques to derive meaning from financial data. Cost accounting is normally used to help the business make tactical decisions to improve business processes whilst financial accounting helps the business to understand its overall financial performance. Financial accounting provides standard reports, normally in a predefined format that can be used by many different areas to understand the financial responsibilities of the business. Reports from cost accounting are normally designed to provide information in very specific areas and to allow managers and executives to make decisions as a result.
Both types of accounting can help to manage risk and increase understanding of the finances of a business and how to improve them. The definition of a job order cost system is an accounting system that counts costs for units of product manufactured – batches or quantities of units sent through manufacturing are called jobs.” A specific job might involve manufacturing twelve guitar fretboards, or perhaps seventeen microprocessors for a computer. When cost accounting is done in a job order system, labor hours are reported on a per-hour basis. Once these costs are totaled up for the given month, year, etc, they are assigned to specific jobs using a concept called cost allocation.
I have had many non-paying jobs as well, and some of these are my favorite jobs. If you were to calculate pay for all of the other jobs I do, my family would not be able to afford me. So, if you are a member of the management or the Board, take the time to learn the basics of accounting so that next time you see the financial reports, you at least know what it is you are reading. So, have pity on your accountants (and yourselves) and try to look at the accounting side of your decisions first before implementing them. The International Accounting Standards Committee (IASC) Foundation based in the USA.
If the management knows accounting, or at least, keeps in mind that any decisions it makes may have an accounting impact, the management may run some accounting numbers or even consult their accountants (and sometimes, even the external auditors) before going through the transaction. There are some disadvantages, mainly you will have to spend more of your time learning and understanding accounting (which is not really that easy). Literally i almost ended up in tears when i was asked to purchase the software.
Just remember, accounting is an integral part of your business and should not be relegated to the sides. Very good hub and I agree with you that a business owner should at least understand the basics of accounting. Knowing accounting and basic business law is quite an edge if you’re a businessman or is self-employed. Most accountants and auditors need at least a bachelor’s degree in accounting or a related field.