Costing is a far-ranging process of determining cost. Kohler described cost bookkeeping as branch of accounting dealing v the classification, recording, allocation, summarization and also reporting the current and prospective costs. According to Mr. Wheldon, cost accountancy is "the classifying, recording and also appropriate allocation the expenditure for the determination of the expenses of assets or services, the relation of these prices to sales values, and the ascertainment of profitability." Cost audit has its objective to maintain records associated with inner transactions (Dutta, 2003).

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There are numerous facets of cost accounting:

cost classification: This is described as grouping of like items of cost into a common group. Expense recording: This denotes come posting of expense transactions right into the miscellaneous ledger preserved under cost audit system. Expense allocation: This refers to allotment of prices to various products or department.

Cost determination or cost finding: This refers to the determination of the price of items or services by unshened procedure.

Cost reporting: This refers to furnishing of expense data on a continual basis so regarding meet the requirements of management.

Under cost accountancy system, price Ledgers space maintained. Cost ledger is provided for maintaining records relating to the genuine or in the name of records. Real accounts space those accounts which contain documents of property, possessions or heritage of a company enterprise. They relate to cash, building, plant, machinery, furniture or fittings. Nominal accounts attend to income, expense, gain and also losses. Therefore sales, other income, salaries and also wage are instance of nominal account (Dutta, 2003). Cost ledger control account offer as a link in between financial and cost account.

Cost ledger can be categorized into principle ledger and subsidiary ledger v its control account.


Source: Mittal, D K, 2009

Cost ledger is rule ledger of expense account. It has all personally account and similar to basic ledger in financial books. The major benefits of expense ledger space that they assist in facilitating end material, labour and overhead expense by giving by a summarized record of costs in various ledgers. Cost ledger assures the closing share of material, job-related in process and finished commodities properly valued without any delay. Accounts for each price centres are prepared individually which offer as communication of cost analysis and control. Essential data because that formulating and setting standard is noted (Macmillan, 2008).

Control Accounts: A regulate account is a synopsis account in the general ledger. The truth that support the balance in the review account room enclosed in a subsidiary ledger which is a ledger outside of the general ledger. The on purpose of the control account is to preserve the general ledger totally free of details, yet have actually the exactly balance for the jae won statements. The details top top each client and every transaction would certainly not be tape-recorded in the account Receivable control account in the basic ledger. Rather, these details the the accounts receivable activity will be in the account Receivable Subsidiary Ledger. Under interconnecting system, manage accounts are kept in the expense ledger come complete twin entry in expense books. These control accounts are total accounts or adjustment accounts summarising accumulation of information consisted of in the subsidiary ledgers that is shop ledger, job ledger and finished stock ledger.

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A control account is maintained in the expense ledger so that twin entry in the price ledger may be completed and also make the self-balancing. These manage accounts room posted through the totals of items which have been debited or credited in information to the account in the ledgers to which lock relate. The balance in manage accounts symbolizes the complete of balances in a variety of accounts of similar nature maintained in the subsidiary ledger come which the control account relates. In addition to these control accounts for each of the subsidiary ledger, a price ledger control account is also kept in expense ledger. This is activate to do the expense ledger self-balancing.

Advantages: there is several benefit of maintaining expense ledger (Bhabatosh Banerjee, 2014):

It provides a examine to ensure that all expenditure is accounted because that in price accounts v the aid of regulate account. It offers a communication for settlement with the jae won accounts. It offers a ready method of prepare monthly or periodical balance sheet, profit and loss account and statistics relating come cost. When cost accounts are individually maintained, it is possible to sustain confidentiality of price data.

It can be developed that expense ledger is principle ledger in cost publications which consists of a regulate account for each of the subsidiary ledgers prefer store ledger manage account, work in development ledger manage account, finished items ledger regulate account. It also comprises of expense ledger regulate account/general ledger mediate account to make the expense ledger self-balancing. A expense ledger control account is kept in price ledger to finish the dual entry.