Cost account ledger system, Cost Accounting

Assignment Help:

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


Related Discussions:- Cost account ledger system

Factory overhead, what are the examples of factory overhead

what are the examples of factory overhead

Semi fixed costs, Semi Fixed Costs Are costs along with both a variabl...

Semi Fixed Costs Are costs along with both a variable and fixed cost component? The fixed component is such portion that is constant irrespective of the level of activity. The

Uniform Capitalization rules, Are public service corporations subject to un...

Are public service corporations subject to uniform capitalization rules?

Storage and issue of material, Storage and Issue of Material A number ...

Storage and Issue of Material A number of questions are relevant in this control of materials throughout storage and question of materials. These are as: a) Stock control r

Assessment item 2, QUESTION 1 Job costing Create a spreadsheet solution to...

QUESTION 1 Job costing Create a spreadsheet solution to the following problem. Follow the template provided. Play the Job cost podcasts and work through the example problem in tho

Find the total landed cost, What conclusion can you draw when comparing the...

What conclusion can you draw when comparing the total landed or delivered cost to the original purchase cost? What does this suggest about the importance of supply chain managem

Stages of implementation of zero based budgeting, Stages of Implementation ...

Stages of Implementation of Zero Based Budgeting 1. Definition of decision package. It is the comprehensive description of the organizations activities or functions.

MARGINAL AND ABSORPTION COSTING, MARGINAL COSTING IS PREFERRED TO ABSORPTIO...

MARGINAL COSTING IS PREFERRED TO ABSORPTION COSTING IN DECISION MAKING WHY

Overhead costs, Overhead Costs Introduction Overhead costs may be...

Overhead Costs Introduction Overhead costs may be defined like the net cost of indirect materials, indirect expenses and indirect labour. They may happen or be charged to

explain your calculation of relevant net cash flows, Polycorp Limited Stee...

Polycorp Limited Steel Division is considering a proposal to purchase a new machine to manufacture a new product for a potential three year contract.  The new machine will cost $1

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd