thnks a lot...
I learnt that in an interlocking a/cing system,d cost dep't of a company open cost profit and loss account.so,i wld like 2 knw hw dis is different frm d normal profit & loss a/c prepared by d financial a/c dep't.
Sorry and I dont mean to be rude - but can you re-phrase this as I still dont understand. I might be being a bit thick this morning but your almost text like shorthand is confusing me)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
as indicated by Joanne, please do not use text speak on the site.
Sure that you appreciate that using such in an accountancy exam would be an automatic fail. You would never dream to contact a client using such and similarly it is wrong to talk to fellow professionals using such.
We can answer your question after you have rewritten it.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I can't thank you all enough for your concern...really appreciate it.
Where there is a cost accounting department and financial accounting department in an organisation,both departments prepare the same accounting records for the organisation's financial transactions under an integrated accounting system.
So,my question is that,what does the 'cost profit and loss account' prepared by the cost accounting department entails.
Thanks a lot.
internal to a business one produces management accounts, what if scenarios and job specific costings (generally to feed into management accounts).
These will invariably entail a P&L specific to the requirements.
To facilitate this different software handles identification of costs and income in different ways but as a rule of thumb there is generally an option for costs and revenue to be allocated to specific jobs via a code (this option may need to be established when the software is first installed or switched on for a new company, switching on for an existing company may prove initially problematic).
Once the software is able to identify costs to either specific jobs or general overheads different P&L's may be produced for that job only then you would drop that to a spreadsheet (say Excel) alongwith a seperate worksheet for general overheads and proportion general overheads to the P&L on a line by line basis in direct proportion to revenue or some other method where such gives a more accurate representation of the facts.
P&L's may be produced by job, by geographic area, by division, etc.
The key is that the costing P&L's are meant for internal reporting only in order to facilitate better day to day running of the business and does not directly relate to the general P&L which is defined in statute and accounting regulations (such as UK GAAP or IFRS).
Hope that helps,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
These seem quite antiquated terms which people seldom now use concentrating more on what their software can do for them rather than the old manual ledgers based systems which underpin modern software.
Cost ledgers are simply the accounting ledgers kept for maintaining the double entry.
Under an intergrated system (refering back to your original question) all of the ledgers are the same as those kept for the production of the accounts but there is another system called interlocking where two sets of accounts are maintained. One for internal costing and one for the accounts.
Interlocking systems should in general be avoided as they can lead to the scenario of clients using "the wrong set of books" which rings warning signs of money laundering.
In answer to your question though cost ledger accounts are just what we refer to as the ledgers but don't really use too much in original form since the advent of computerised accounting packages.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks once again sir;I am really elated.
Please sir,why is notional 'rent' always included as income in the cost p&l despite it being an overhead expense?. And what are those things that are contained in the cost p&l?
A cost P&L will generally include all of the same entries as are included in an accounting P&L but may be more flexible because where the accounting version is based in statute the cost version is for management rather than statutory reporting purposes.
Rent can either be Income (if you are the one renting something out) or an expense (if you are renting something yourself).
Notional rent is rent that may become due / may be owed but has not become due/owed though the real accounts yet (or indeed may never be). However, it is included in your management accounts / what if scenario's to give a more complete picture.
Think of it as making a prediction based on incomplete facts where you need to include additional notional figures to get a better understanding of what the scenario would be were all the facts known.
These seem quite unusual questions Tajudeen, can you give us some idea of the background to your questions? i.e. is this a task that you have been asked to do for work or is this perhaps a learning excercise? If the latter which professional body is asking these sort of questions?
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
