| 1. | Meaning | Recording, classifying and summarizing of financial transactions and events. | Recording, classifying and summarizing of Cost data. |
| 2. | Covers | Preparation and interpretation of financial statements and communication to the users of accounts. | Preparation of periodical statements and reports for ascertaining cost of production. |
| 3. | Objective | To prepare financial statements i.e. profit & loss a/c and balance sheet etc. | To ascertain cost of production, reduce the cost, control the cost and prepare cost statements and reports. |
| 4. | Need | Final accounts are prepared as per Companies and Income Tax Act, 1961. | Cost accounts are prepared as per the requirement of management. |
| 5. | Information Type | Quantitative. | Quantitative. |
| 6. | Period | Financial accounting is done for definite period. | No definite period. Cost reports are prepared according to the requirement of management. |
| 7. | Analysis of profit | Reveals the profit of whole business. | Reveals the profit of each product, job or process. |
| 8 | Users | Shareholders and stakeholders. | Internal management. |
| 9. | Stock valuation | As per AS-2 stocks are valued at cost or net realizable value whichever is less. | Stocks are valued at cost. |
| 10. | Relative Efficiency | Do not reveal the relative efficiency of each department. | Provide information on the relative efficiencies of various Plant and Machinery. |