File Name: reconciliation of cost and financial account .zip
- Financial Accounting Questions And Answers Pdf
- Financial accounting
- Chapter 14: Reconciliation of Cost and Financial Accounts- Questions Notes | EduRev
- CA IPCC Reconciliation of Cost and Financial Accounts Questions
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 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.
Use filters to display the questions to a particular subject or section. Download full-text PDF Answer all questions. Software Practice Sets with answers. HR Interview Questions. Working notes should form part of the answer. Long types Questions: Q6: Define accounting and state its objectives. Question4: Difference between Financial Accounting and Bookkeeping?.
CA IPCC Students please refer to the attached file for solutions for important questions which came in previous examinations for Cost Accounting and also study notes. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning. There are stories of innovation, sacrifice, going beyond the call of duty, challenges faced and creatively solved, humour, finding joy in adversity etc. It will be highly useful to
Chapter 14: Reconciliation of Cost and Financial Accounts- Questions Notes | EduRev
In this Case, both the accounts results are necessary to reconcile. It is prepared by showing the reasons for the difference in the results of accounts. It is done to make the arithmetical accuracy. Reconciliation Statement is a Memorandum Reconciliation Account to know the items required to make the profits of Cost Accounts with the Financial Accounts.
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. Financial accountancy is governed by both local and international accounting standards. Generally Accepted Accounting Principles GAAP is the standard framework of guidelines for financial accounting used in any given jurisdiction.
CA IPCC Reconciliation of Cost and Financial Accounts Questions
MeaningIn business concern where Non-integrated Accounting System is followed. Reconciliation of cost and financial accounts mean tallying the profit or loss revealed by bothset of accounts. The chief aim is to find out the reasons for the difference between the results shown byCost Accounts 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.
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.
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