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:




 Stores Ledger Control a/c



 W.I.P. control a/c



 Finished Goods Control a/c



 Costing Profit and Loss a/c



 Financial Ledger Control a/c



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

Break-Even Chart This is a diagrammatic presentation of the relationship among costs, prices, expenses and the sales volume. A break-even chart expresses revenue and expens

1) The Svelte Jeans Company produces two different types of jeans. One is called the "Simple Life" and the other is called the "Fancy Life". The company sales budget estimates that

Frame-it Ltd is a manufacturer of metal picture frames. The firm's two product lines are designate S (small frames: 12 x18 cm) and L (large frames: 20 x 25 cm). The primary raw mat

Participation - Behavioural Aspects of Standards It has already been pointed out in the previous paragraph such standard costing systems would be more acceptable whether the e

#question.discuss the importance of cost classification to a business organisation?

traditional budgeting systems are incremental in nature and tend to focus on cost centres..explain the weakness of the incremental budgeting system and explain ways of adressing th

Financial Accounting It is the analysis, and recording and classification of financial transactions and the ascertainment of how that information will be reported to the diffe

Example of Economic Order Quantity The EOQ model supposes : - Annual demand is recognized - Hold costs are constant and recognized - Ordering costs are recognized a