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Management accounting is necessary to provide the accounting information for their
regular or day to day operation of the organization. It provides essential information
to every hierarchy of management to perform management function. So providing
accounting information in a meaningful and understandable way to the manager is
called management accounting.

"Management accounting is the application of professional knowledge and
skill in the preparation of accounting information in such a way as to assist
management in the formulation of policies and in the planning and control of
the operations of the undertaking. - I.C.M.A., London

Financial Accounting

Financial accounting is related with financial transactions of the business concern. It
is concerned with recording, classifying, summarizing, interpreting and presenting
the financial position of the operation for the selected period of time. It provides
the information to external users such as potential investors, creditors, government
authorities, trade union, as well as internal users. It is the process of summarizing
financial data taken from an organization's accounting records and publishing in the
form of periodical reports for the benefit of people outside the organization.
Thus, financial accounting is an art of recording, classifying and summarizing the
financial transactions of a firm in such a manner that its profit and loss and financial
positions are determined at the end of each accounting period and communicated to
the user.

Cost Accounting
Cost accounting is the branch of accounting discipline concerned with development
of cost information related to the activities of an economic entity. This cost information
may be used for future cost development and planning purposes. It may emerge
somewhat routinely not of a carefully designed system which has been developed to
provide information regarding recurring activities, or be the result of a special cost
study directed to an objective not considered in the design of the regular system.
Cost accounting is the processing and evaluation of monetary and non-monetary
data to provide information for external reporting, internal planning and control
of business operations and special analysis and decisions. Thus cost accounting is
regarded as a tool of management which provides the management with detailed
records of cost relating to products, services or, operating activities. It is a process of
accounting for cost from the point of which expenditure is incurred or committed to
the establishment of its ultimate relationship with various cost centers and cost units.

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