Reconciliation Of Cost And Financial Account Pdf

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Reconciliation of Cost and Financial Accounts

This article gives information about the need, methods, procedure and memorandum for reconciliation of costing and financial accounts with specimen. In those concerns where there are no separate cost and financial accounts, the problem of reconciliation does not arise. But where cost and financial accounts are maintained independent of each other, it is imperative that periodically two accounts are reconciled. Though both sets of books are concerned with the same basic transactions but the figure of profit disclosed by the former does not agree with that disclosed by the latter. Thus, reconciliation between the results of the two sets of books is necessary due to the following reasons:. To find out the reasons for the difference in the profit or loss in cost and financial accounts and to indicate the position clearly and to be sure that no mistakes pertaining to accounts have been committed.

When cost accounts and financial accounts are maintained in two different sets of books, there will be prepared two profit and loss accounts - one for costing books and the other for financial books. The profit or loss shown by costing books may not agree with that shown by financial books. Consequently, the problem of reconciliation does not arise under the integral system. However, where two sets of accounting systems, namely, financial accounting and cost accounting are being maintained, the profit shown by the two sets of accounts may not agree with each other. Although both deal with the same basic transactions like purchases consumption of materials, wages and other expenses, the difference of purpose leads to a difference in approach in a collection, analysis and presentation of data to meet the objective of the individual system. Financial accounts are concerned with the ascertainment of profit or loss for the whole operation of the organisation for a relatively long period, usually a year, without being too much concerned with cost computation, whereas cost accounts are concerned with the ascertainment of profit or loss made by manufacturing divisions or products for cost comparison and preparation and use of a variety of cost statements.

Financial Accounting Questions And Answers Pdf

There are a number of differences between cost accounting and financial accounting , which are as follows:. Financial accounting involves the preparation of a standard set of reports for an outside audience, which may include investors , creditors , credit rating agencies , and regulatory agencies. Cost accounting involves the preparation of a broad range of reports that management needs to run a business. The reports prepared under financial accounting are highly specific in their format and content, as mandated by either generally accepted accounting principles or international financial reporting standards. Cost accounting involves creating reports that can be in any format specified by management, with the intention of including only that information pertinent to a specific decision or situation.

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You are required to prepare a reconciliation statement between the profit figures as per costing and financial accounts. Calculate the profit as per financial books. The cost account for the same period show that direct material consumption was 78,40, Works overheads are recovered @ 20% of Prime cost.


Chapter 14: Reconciliation of Cost and Financial Accounts- Questions Notes | EduRev

Overview A statement which is prepared for reconciling the profit shown by cost and financial account is known as reconciliation statement. It helps to find out the reasons for the differences in the profit or loss in cost and financial accounts. Thus, cost accounting and financial accounting are two different accounting systems. The differences between these two topics occur not only because of the error in the system but also due to the different procedures and principles carried by these accounts. Moreover, the amounts of profit and loss obtained from both accounts are often found to be different.

Financial accounting or financial accountancy is the field of accounting concerned with the currency, analysis and reporting of financial transactions related to a business. Stockholders , suppliers , banks , employees , government agencies , business owners , and other stakeholders are examples of people interested in receiving such information for decision making purposes.

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Парк был пуст. - Фильтр Х-одиннадцать уничтожен, - сообщил техник.  - У этого парня зверский аппетит. Смит начал говорить. Его комментарий отличался бесстрастностью опытного полевого агента: - Эта съемка сделана из мини-автобуса, припаркованного в пятидесяти метрах от места убийства. Танкадо приближается справа, Халохот - между деревьев слева. - У нас почти не осталось времени, - сказал Фонтейн.

Вы уверены. Но Пьер Клушар провалился в глубокое забытье. ГЛАВА 23 Сьюзан, сидя в одиночестве в уютном помещении Третьего узла, пила травяной чай с лимоном и ждала результатов запуска Следопыта. Как старшему криптографу ей полагался терминал с самым лучшим обзором. Он был установлен на задней стороне компьютерного кольца и обращен в сторону шифровалки.

CA IPCC Reconciliation of Cost and Financial Accounts Questions

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1 Response
  1. Baygnomdedar1967

    Reconciliation of cost and financial accounts mean tallying the profit or loss revealed by both set of accounts. The chief aim is to find out the reasons for the.

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