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cost accounting-1

cost accounting-1

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Published by prasadparulekar
cost accounting
cost accounting

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Published by: prasadparulekar on Oct 05, 2013
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12/06/2013

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 Compiled by Prof. Prasad Parulekar 1
Chapter 4COST ACCOUNTING
 
Introduction
 
 Analysis of Cost and Profit --- Important forDesign Engineer ---for Investment Decision
 
Investment records --- should be maintained ---helpful in comparing actual financial results
 
 Accountant
 – 
maintain and interpret all theserecords
 
Cost predictions by accountant & design engineer
 – 
different --- if different cost factors are used
 
Purpose of Accounting --- record and analyze any financial transactions influencing utility of capital
 
Contents of Records--- accounts of expenses,accounts of income, accounts of assets &accounts of liabilities
 
 Account records --- useful in finding errors inpast estimates & getting useful information forfuture evaluation
 
Design engineer--- should have basic knowledgeof accounting 
 
Outline of Accounting Procedure
 
 Accounting Procedure
--- starts with recording original
business transactions
& proceeding tofinal preparation of 
summarizing balance sheets& income statements
 
 Compiled by Prof. Prasad Parulekar 2
 
Day-by-day business transactions---recorded in
 Journal
 
Small business --- all entries in single journal; Largebusiness concern
 – 
different journals for differententries
 
 
 Assembling journal entries in appropriate accountheading ---
Ledger
 
Posting ---
transferring daily journal entries toledger
 
 
Financial conditions of business --- shown by periodic statements i.e.
Balance-sheets & IncomeStatement
 
Balance sheet ---
shows financial condition of business at particular time
 
 
Income statement -
--shows financial gain or lossover a given period of time
 Fig. 4.1
Diagram of Accounting Procedure
 
 Compiled by Prof. Prasad Parulekar 3
 
Basic Relationships In Accounting
 
 
 Asset
--- anything that has value e.g. cash, land,building, equipments, raw material, finished products,any other property, etc.
BALANCE SHEETFINANCIAL STATEMENTSLEDGER GENERALJOURNALPURCHASEJOURNALSALESJOURNALCASHJOURNALJOURNALBUSINESS TRANSACTIONSINCOMESTATEMENT

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