Cost account ledger system, Cost Accounting

Cost Account Ledger System

A cost account ledger system is essential to analyze accounting information in order such costs may be accumulated for individual cost centers and charged to cost units. The information in the cost ledger will be employed for a range of planning, decision and control making reasons. 

- The cost ledger control account in the financial ledger is a memorandum account that records the financial information that has been extracted for employ in the cost ledger.

- The financial ledger control in the cost ledger has two main reasons as:

(i) It creates the cost ledger self-balancing:  It gets the place of an asset liability accounts in that one leg of the double entry would appear the financial ledger for all transaction as an example of the purchase of material on credit would be credited to sundry creditors control account in the financial ledger. In the cost ledger, it is credited to the financial ledger control account.

(ii) It enables an internal check to be performed via comparing its balances along with that of the cost ledger control account in the financial ledger.  Both must record a balance that represents stock balances or Raw material, W.I.P and financial goods the total profit, while all other transactions have been completed.  Any type of difference should be reconciled and investigated.  Hence the final trial balance in the cost ledger will appears:

 

Dr

Cr

 Stores Ledger Control a/c

x

 

 W.I.P. control a/c

x

 

 Finished Goods Control a/c

x

 

 Costing Profit and Loss a/c

 

x

 Financial Ledger Control a/c

 

x

Posted Date: 2/5/2013 11:56:47 PM | Location : United States







Related Discussions:- Cost account ledger system, Assignment Help, Ask Question on Cost account ledger system, Get Answer, Expert's Help, Cost account ledger system Discussions

Write discussion on Cost account ledger system
Your posts are moderated
Related Questions
Shirley and Ken are in partnership, trading in the construction industry. The year end for the partnership business is 30 June. You are the Assistant Accountant and have been as

Cost Units - Terms Used in Cost Accounting It is the quantitative units of the service or product in relation to those costs are ascertained. The cost unit will be determined

material ledger card.following transactions affecting material No115-8 occurred during march 1992. march 1 balanced on hand 500 gallons@Rs.20 per gallon maech 2 received 1200 gall


Tracking Overhead Jack would have a many task at hand if he tried to daily trace all such items of overhead. For example: x     How difficult it would  become to track the "

Martinez Corporation engaged in the following cash transactions during 2012. Sale of land and building $186,710 Purchase of treasury stock 42,130 Purchase of land 39,130

what is rowan incentive system

A manufacturing company wants to package its product in a rectangular box with a square base and a volume of 32 cubic inches. The cost of the material used for the top is $.05 squa


A company wishes to devise a fair means of allocating funds to its four main departments, namely Accounts, Production, Sales and Transport. The total allocation is to be £100,000.