PPT: Cost Accounting System | Cost and Management Accounting for CA Intermediate PDF Download

 Page 1


Cost Accounting
Cost Accounting 
System
Non-
Integrated
Financial 
Accounting 
Books
Cost Accounting 
Books
Integrated
Common Set of 
Books for Financial 
and Cost Accounts
Page 2


Cost Accounting
Cost Accounting 
System
Non-
Integrated
Financial 
Accounting 
Books
Cost Accounting 
Books
Integrated
Common Set of 
Books for Financial 
and Cost Accounts
Non-Integral Accounts
• Separate set of books for Financial Accounts and Cost 
Accounts are maintained.
• Cost accounting books can also be maintained on the basis of 
double entry system to help in checking the accuracy.
• There are three types of accounts – Personal, Real and 
Nominal. In cost accounts, we are mainly concerned with 
nominal accounts and few real accounts.
• Rules of Debit and Credit are the same.
• This also facilitates reconciliation of cost and financial accounts.
Page 3


Cost Accounting
Cost Accounting 
System
Non-
Integrated
Financial 
Accounting 
Books
Cost Accounting 
Books
Integrated
Common Set of 
Books for Financial 
and Cost Accounts
Non-Integral Accounts
• Separate set of books for Financial Accounts and Cost 
Accounts are maintained.
• Cost accounting books can also be maintained on the basis of 
double entry system to help in checking the accuracy.
• There are three types of accounts – Personal, Real and 
Nominal. In cost accounts, we are mainly concerned with 
nominal accounts and few real accounts.
• Rules of Debit and Credit are the same.
• This also facilitates reconciliation of cost and financial accounts.
Financial Books
There are three important financial ledgers in Financial Books:
1. General Ledger: It contains 
a) all real, nominal and personal accounts (except those of trade debtors
and trade creditors),
b) Debtors Ledger control A/c (Total Debtors A/c)
c) Creditors ledger control A/c (Total Creditors A/c)
d) Cost Ledger Control account: This is a memorandum account only. It
records all items of expenditure and income relating to cost accounts. This
account is just a reverse or contra of General Ledger Adjustment A/c,
maintained in the Cost Ledger.
2. Debtors Ledger: It contains personal accounts of all debtors.
3. Creditors Ledger: It contains personal accounts of all creditors.
Page 4


Cost Accounting
Cost Accounting 
System
Non-
Integrated
Financial 
Accounting 
Books
Cost Accounting 
Books
Integrated
Common Set of 
Books for Financial 
and Cost Accounts
Non-Integral Accounts
• Separate set of books for Financial Accounts and Cost 
Accounts are maintained.
• Cost accounting books can also be maintained on the basis of 
double entry system to help in checking the accuracy.
• There are three types of accounts – Personal, Real and 
Nominal. In cost accounts, we are mainly concerned with 
nominal accounts and few real accounts.
• Rules of Debit and Credit are the same.
• This also facilitates reconciliation of cost and financial accounts.
Financial Books
There are three important financial ledgers in Financial Books:
1. General Ledger: It contains 
a) all real, nominal and personal accounts (except those of trade debtors
and trade creditors),
b) Debtors Ledger control A/c (Total Debtors A/c)
c) Creditors ledger control A/c (Total Creditors A/c)
d) Cost Ledger Control account: This is a memorandum account only. It
records all items of expenditure and income relating to cost accounts. This
account is just a reverse or contra of General Ledger Adjustment A/c,
maintained in the Cost Ledger.
2. Debtors Ledger: It contains personal accounts of all debtors.
3. Creditors Ledger: It contains personal accounts of all creditors.
Cost Books
I. Subsidiary Ledgers:
• Stores ledger: In this ledger a separate account is opened for 
each item of Store. (refer to Materials Chapter)
• Work-in-progress or Job ledger: In this ledger a separate
account is opened for each job and product in process.
Production and costs incurred are recorded.
• Finished goods or Stock Ledger: A separate a/c is opened for
each item of finished goods. (Refer to Process A/c)
(Continued)
Page 5


Cost Accounting
Cost Accounting 
System
Non-
Integrated
Financial 
Accounting 
Books
Cost Accounting 
Books
Integrated
Common Set of 
Books for Financial 
and Cost Accounts
Non-Integral Accounts
• Separate set of books for Financial Accounts and Cost 
Accounts are maintained.
• Cost accounting books can also be maintained on the basis of 
double entry system to help in checking the accuracy.
• There are three types of accounts – Personal, Real and 
Nominal. In cost accounts, we are mainly concerned with 
nominal accounts and few real accounts.
• Rules of Debit and Credit are the same.
• This also facilitates reconciliation of cost and financial accounts.
Financial Books
There are three important financial ledgers in Financial Books:
1. General Ledger: It contains 
a) all real, nominal and personal accounts (except those of trade debtors
and trade creditors),
b) Debtors Ledger control A/c (Total Debtors A/c)
c) Creditors ledger control A/c (Total Creditors A/c)
d) Cost Ledger Control account: This is a memorandum account only. It
records all items of expenditure and income relating to cost accounts. This
account is just a reverse or contra of General Ledger Adjustment A/c,
maintained in the Cost Ledger.
2. Debtors Ledger: It contains personal accounts of all debtors.
3. Creditors Ledger: It contains personal accounts of all creditors.
Cost Books
I. Subsidiary Ledgers:
• Stores ledger: In this ledger a separate account is opened for 
each item of Store. (refer to Materials Chapter)
• Work-in-progress or Job ledger: In this ledger a separate
account is opened for each job and product in process.
Production and costs incurred are recorded.
• Finished goods or Stock Ledger: A separate a/c is opened for
each item of finished goods. (Refer to Process A/c)
(Continued)
Cost Books
II. Cost Ledger:
Cost Control Accounts:
• Control accounts are the Summary (or Total) Accounts which
are maintained for the subsidiary ledger in the cost books under
non integral system.
• These accounts are prepared on the basis of periodic summary
or total of transactions in the respective subsidiary ledger.
• These accounts are maintained in the cost ledger to complete
the double entry so that the accuracy can be checked.
(Continued)