Accounting Records vs. Costing Records - Cost Book Keeping, Cost Accounting Video Lecture | Cost Accounting - B Com

accounting records versus cost records
accounting records are the records
maintained in the financial books this
is what most of us are familiar with but
cost records are maintained and of cost
accounting books we could have a
separate set of books one for financial
and one for costing let us just roughly
understand what is the difference do
they overlap etc when goods are
purchased when raw materials are
purchased the entry that is passed in
the financial books is purchases account
debit to creditors and when they are
paid creditors account debit to back
once the materials are purchased they
come in to the stores the function of
the financial accountant is over with
the purchase of the materials he is not
concerned with what happens in the
factory what happens to the goods in the
store what happens if the goods move to
the shop flow move into the production
area what happens when the goods are
complete here another set of records are
maintained the cost accounting records
entries are also passed by cost
accountants the details of which would
be discussed at a more advanced level
however just to understand simply the
goods are stored in the store stores
area of the factory
as and when required as and when
production as and when raw materials are
required for production and the
materials move into the shop floor and
entry is actually passed debiting the
work-in-progress and crediting the
materials from accounting entries we may
know what is the material in store what
is the value of the work in progress the
way of issuing the method of issuing may
be free for may be weighted average
whatever as discussed when the goods are
complete the goods move out of work in
progress and come in to finished goods
at each stage there would be some kind
of accounting entry while these records
are maintained in the costing books in
the financial books we stopped with the
recording of purchase the finished goods
are later sold the moment the goods are
sold entries are passed in the financial
books
let us debit to sales and when money is
collected bank account to dentists
in a way
with the purchase of materials the
function of the financial accountant is
over when a huge amount of materials
come into the store some degree of
control has to be exercised that is the
function of the cost accounting records
similarly when goods are sold
entries are passed in the financial
books
and the entries affecting the cost of
goods sold is past in the constant books
thus control of materials control of the
production process control of waste etc
is all managed through cost accounting
records