Non-Integrated Accounts

 Meaning u If the cost and financial transactions are kept separately,the system is called Non-Integrated Accounting System  Important Ledgers to be Maintained u General Ledger Control Account u Stored Ledger Control Account u W-I-P Control Account u Finished Goods Control Accounts  Scheme of Entries - Double Entries basis

PRINCIPLE ACCOUNTS  General Ledger Control Account  Stored Ledger Control Account  W-I-P Control Account  Finished Goods Control Accounts  Wage Control Account  Manufacturing/Production/Works Overhead Account  Administration Overhead Account  Selling and Distribution Overhead Account  Cost of Sales Account  Costing Profit & Loss Account  Overhead Adjustment Account

Cost Ledger Control Account  Also known as General Ledger Adjustment Account  All items of expenditure are credited to this account  Sales are debited to this account  Net profit/loss is transferred to this account  Balances in this account represents the net total of all the balances of the impersonal accounts

STORES LEDGER CONTROL ACCOUNT  Debited with total of material purchases  Credited with issues of materials  Balance in this account represents the total balance of all individual stores accounts  Abnormal loss\gain in this account transferred to Costing P & L a/c.

W-I-P CONTROL ACCOUNT  Debited with the total cost Of production i.e, u direct materials u direct labour u direct expenses u production overhead recovered  Credited with amount of finished goods completed and transferred  Balances in this account represents total balances of jobs/w-i-p as shown several jobs accounts

FINISHED GOODS CONTROL ACCOUNT  Debited with u value of goods trf. From w-i-p a/c u administration cost recovered  Credited with u cost of goods sold and cost of sales a/c  Balance this account represents value of goods lying in hand.

OVERHEAD ADJUSTMENT ACCOUNT  the difference the overhead incurred and overhead recovered transferred to this a/c.  Debited with under recovery of overheads  Credited with over recovery of overheads.  Balance in this a/c. trf. to Costing P & L a/c.  Another treatment of under/over absorbed overheads is u carry forward to the next financial year by means of Overhead Suspense(Reserve) A/c.

RECONCILIATION OF COST AND FINANCIAL ACCOUNTS

Causes which gives rise to differences in the Cost and Financial Accounts  Items included in the financial accounts but not in cost accounts u Appropriation of Profits u Matters of pure finance u Items included in the cost accounts only (notional expenses) u Under and Over recovered expenses  Difference due to varying basis of valuation

INTEGRATED (OR INTEGRAL) ACCOUNTING SYSTEM

MEANING AND IMPORTANT POINTS Meaning Integrated Accounts is the name given to a system of accounting whereby cost and financial accounts are kept in the same set of books Important Points For Costing it provided information useful for ascertaining the cost of each product,job,process,operation of any other identifiable activity and for carrying necessary analysis For Financial accounts preparing profit and loss account and the balance sheets as peer the requirement of the law and also helps in exercising effective control over the liabilities and assets of its business.