The accounting system , as developed originally, concerned only the financial state of the affairs and the financial results of operations.This is called "Financial Accounting"
It includes preparation of accounts, generally on historical basis, so as to enable the management to prepare the financial statements showing the results of operations and the financial state of affairs, to exercise full control over the property and assets of the firm or the institute concerned and to prepare returns and statements concerning
taxation.
Cost Accounting developed because of the limitation of financial accounting in respect of information relating to the cost of individual jobs,products,etc
This information is needed for the purpose of making numerous decisions(e.g. the prices to be quoted a special customer or the priority to be accorded to a product when resources are scares.etc.) and for exercising control over the costs being occurred. Cost Accounting basically involves estimating costs in advance and detailed analysis.
A third branch of accounting which has now developed is Management Accounting. It means such accounting as will enable management to discharge its functions properly, chiefly in respect of forecasting and budgeting, control over costs and revenues decisions, both routine and strategic
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