Module 2:
NON-INTEGRATED
ACCOUNTING SYSTEM
Class: TYBAF
SEM :5
Subject Incharge: [Link] Tuscano
Accounting
Books
Financial
Cost Books Books
Maintained By Cost Maintained Financial
Accountant By CA Statements
Cost Tr.A/c+P/L+Bal.
Reduction sheet+CFS
Ascertainme Journal –
nt of cost [Link].
Profit
estimation
Fixing of
Selling price
• When both the books are maintained separately it is known as
NON-Integrated System
• Both this systems give profit ,it has to be same but due to some
limitations there might be variations ,which is corrected through
reconciliation Statement
Cost -Accountant
Computatio
n
StatementFor
m Accounts Form
(Cost –Sheet)
Cost sheet
Direct Material Xxx
+ Direct wages Xxx
Prime Cost Xxxx
+Factory ohs Xxx
Factory Cost Xxxx
+Office &Adm ohs Xxx
Cost of Production Xxxx
+[Link] F.G Xxx
-[Link] of F.G Xxx
Cost of Goods sold Xxxx
+Selling & Dist Xxx
Total Cost Xxxx
+Profit Xx
sales xxxx
• Real and
personal a/c
Journal
are not ONLY NOMINAL
A/cs
maintained Accounts Form Ledger
Trial balance
Stores ledger control A/c
Wages Ledger control a/c
Factoryohs Ledger control
WIP Ledger control a/c
Adminstrative Ledger control
a/c
Finished goods Ledger control
a/c
Selling &dist. Ledger control
a/c
Cost of sales A/c
Costing Profit/loss A/c
General ledger adjustment A/c
General Ledger example
Purchase of Materials
Purchase A/c …Dr
To Cash A/c - Real
To Bank a/c- personal
To Creditors A/c-Personal
Now, Cost Accountant prepare’s only Nominal A/c.
We follow double entry system
• Therefore,we need to prepare General ledger Adjustment A/c
Purchase A/c
To General ledger Adjustment A/c
• But we do not prepare Purchase A/c ,therefore final entry
Stores Ledger Control A/c
To General ledger Adjustment A/c
Ledgers to be opened
Stores ledger control A/c
Wages Ledger control a/c
Factoryohs Ledger control
WIP Ledger control a/c
Adminstrative Ledger control a/c
Finished goods Ledger control a/c
Selling &dist. Ledger control a/c
Cost of sales A/c
Costing Profit/loss A/c
General ledger adjustment A/c
Journal Entries of purchase
• Purchase of material for cash
Stores ledger control A/c …Dr
To General ledger Adjustment A/c
• Purchase of material for Credit
Stores ledger control A/c …Dr
To General ledger Adjustment A/c
• Purchase of material on Special requirement of Job(Important)
Work-in-progress A/c..Dr
To General ledger Adjustment A/c
• Purchase of material for immediate repair work(Important)
Factory ohs ledger control A/c…Dr
To General ledger Adjustment A/c
Jo A/c mein aayega woh… Debit
Jaha se nikla who-- credit
• Issue of Direct Material
Work-in-progess A/c…Dr
To stores ledger A/c
• Return of materials to vendor /supplier from
stores
General ledger adjustment control A/c…Dr
to Stores Ledger control A/c
• Issue of Indirect material to production
Factory ohs ledger control A/c..Dr
To stores ledger control A/c
• Return of Material to Stores
Stores ledger control A/c …Dr
To work –in progress ledger control A/c
IMPORTANT POINTS To Remember
SLC ,WIP,FG & GLA will always have a opening balance given in
the opening Trial balance & hence Closing Values /balances of this
accounts will transferred to the Closing Trial balance
Wages control a/c should alawys get tallied as wages allocated will
always be equal to wages Paid /issued
OVERHEADS
If the opening balance of the overheads A/cs is given in the question
then the closing balance of this a/c Accounts will be transferred to the
closing trial balance
If No opening balance is given then the closing balance will be
indicate either Over-absorbtion or Under-absorbtion which will be
transferred to Closing P/L A/c
IMPORTANT POINTS To Remember
• If there is NO absorbtion entry given in the question then the
entire balance of that overhead A/c will be transfered to its
respective absorption A/cs(i.e F O/H ---WIP, O/A O/H----fg
,S/D O/H ---COS) & there will be (NO Under absorption or
Overabsorption of overheads)
• If the question does not specify about how many goods
produced are transferred to finished stock account from
wip account then the entire balancing figure of w ip
account will be transferred to finish stock account and
there will be no closing balance for wip account
IMPORTANT POINTS To Remember
• similarly for finished stock account if the question does
not specify about how many goods are to be sold then
the entire balance of finished stock account will be
transferred to cost of sales account and there will be
no closing balance or stock of finished stock A/c .
• Factory overheads ledger control account can also be
called as production /works /manufacturing overhead
ledger control account
• General ledger adjustment account can also be called
as cost ledger control account