Situation Financial records Non-integrated record Integrated records 1. Raw material 1) Purchase of raw material by cash or on credit including expenses for purchase. Purchase A/C Dr. To cash/creditors A/C Raw material control a/c Dr. To general ledger adj. a/c Raw material Control a/c To cash/ creditors a/c 2) Purchas of raw material directly issued to production without routine through stores a/c purchase a/c Dr. To cash/creditors a/c WIP control A/c To general ledger adj. a/c WIP control a/c To cash/creditors a/c 3) Issue of raw material to production No entry WIP control a/c To raw material control/c WIP control a/c To raw material control a/c 4) Return of raw material to suppliers and venders Creditors a/c Dr. To purchase a/c General ledger adjust.a/c To raw material control a/c Creditors a/c Dr. To raw material control a/c 5) Return of raw material from production No entry Raw material control a/c To WIP control a/c Raw material control a/c To WIP control a/c 6) Issue of raw material for maintenance Repair & maintenance Exp.a/c To purchase a/c Factory O/H control a/c To raw material control a/c Factory O/H control a/c To raw material control a/c 7) Abnormal loss 1. For abnormal loss 2. For insurance Abnormal loss a/c To trading a/c Cash/claim R/C A/C P &L A/C To abnormal loss a/c Abnormal loss a/c To raw material control a/c Costing P&L a/c To abnormal loss a/c Abnormal loss a/c To raw material control a/c Cash/claim R/C a/c Coating P&L a/c To abnormal loss a/c 2. Labour cost (wages) 1) Payment of wages Wages a/c Dr. To cash bank a/c Wage control a/c Dr. To General ledger adj. a/c wage control a/c Dr. to bank/cash a/c 2) Analysis of wages into direct/indirect and abnormal No entry WIP progress a/c(Direct Wage) Factory O/H a/c(Indirect Wage) Abnormal loss(Over Time) Wage Control a/c WIP progress a/c(Direct Wage) Factory O/H a/c(Indirect Wage) Abnormal loss(Over Time) Wage Control a/c 3. Overheads & absorption 1) Incurrence of O/H or indirect Expenses Variance Exp. a/c Dr. To cash/bank a/c Factory O/H control a/c Dr. Adm. O/H Control a/c Dr. Selling O/H Control a/c Dr. To general ledger adj. a/c Factory O/H control a/c Dr. Adm. O/H Control a/c Dr. Selling O/H Control a/c Dr. To general ledger adj. a/c 2) Depreciation on Fixed Assets Depreciation a/c Dr. To fixed Assets a/c Factory O/H control a/c Dr. Adm. O/H Control a/c Dr. Selling O/H Control a/c Dr. To general ledger adj. a/c Factory O/H control a/c Dr. Adm. O/H Control a/c Dr. Selling O/H Control a/c Dr. To fixed Assets a/c 3) Absorption of factory O/H No entry WIP Control a/c Dr. To factory O/H Control a/c WIP Control a/c Dr. To factory O/H Control a/c 4) Normal under absorption of factory O/H No entry COGS Control a/c Dr. FG Control a/c Dr. WIP Control a/c Dr. To factory O/H Ctrl a/c COGS Control a/c Dr. FG Control a/c Dr. WIP Control a/c Dr. To factory O/H Ctrl a/c 5) Abnormal under absorption of factory O/H No entry Costing P&L A/C DR. TO Factory O/H Control a/c P&L A/C Dr. To factory O/H Control 6) Over absorption of factory OH(if written off to P&L) No entry Factory O/H Control a/c Dr. To costing P&L Factory O/H Control a/c To P&L A/C 7) Recording goods produced(at factory cost) No entry Finished goods control a/c Dr. To WIP control a/c Finished goods control a/c To WIP control a/c 8) Absorption of administrative O/H No entry Finished goods control a/c Dr. To AOH A/C Finished goods control a/c To AOH A/C 9) Under absorption of AOH (under absorption of AOH can be written off to costing P&L Accounts, as an alternative accounting treatment) No Entry COGS(for sale qtty) Dr. Finished goods ctrl(for FG qtty) To factory O/H COGS(for sale qtty) Dr. Finished goods ctrl(for FG qtty) To factory O/H 10) Recording Cost of goods sold(at total cost of production) No entry Cost of sales a/c Dr. To finished goods ctrl a/c Cost of sales a/c Dr. To finished goods ctrl a/c 11) Absorption of selling O/H No entry Cost of sales a/c Dr. To SOH a/c Cost of sales a/c Dr. To SOH a/c 12) Under absorption of SOH No entry Costing P&L a/c Dr. To SOH control a/c Costing P&L a/c Dr. To SOH control a/c 4) Sales and profit 1) Sales realisation Cash and sundry debtors a/c Dr. To sales a/c General ledger adj a/c Dr. To sales a/c Cash and sundry debtors a/c Dr. To sales a/c 2) Transfer of cost of sales to profit and loss account Sales Dr. Other income Dr. To P&L a/c Sales a/c Dr. To cost of sales P&L a/c Dr. TO Cost of sales a/c To other expenses a/c 3) Transfer of sales profit and loss account Sales a/c Dr. Other income a/c To P&L a/c Sales a/c Dr. To costing P&L a/c Sales a/c Dr. other income a/c Dr. to P&L a/c 4) Profit for the period P&L a/c Dr. To capital a/c Costing P&L a/c Dr. To general ledger a/c P&L a/c Dr. To capital a/c 5) CAPITAL WORK IN PROGRESS 1) Work in Progress:- Materials Issued Capital WIP Dr. To cash/ purchase For purchase: Raw materials Control Dr. To Gen. ledger. Adj. For issue: Capital WIP Dr. To Raw material control For purchase : Raw material control Dr. To cash/ S. creditors For issue: Capital WIP Dr. To Raw material control 2) completion of capital Asset Fixed asset Dr. To capital WIP General ledger Adj. Dr. To capital WIP Fixed asset Dr. To capital WIP
Posted on: Sun, 01 Sep 2013 14:56:35 +0000
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