CA.

Naresh Aggarwal’s Classes

Financial Accounting • Corporate Accounting • Cost Accounting • Financial Management www.youtube.com/canareshin

Journal Entries for ‘Integrated’ and ‘Non-Integrated’ System of Accounting

Material Related Transactions

# Transaction Financial Accounting Non Integrated Accounting Integrated Accounting
__________________________________________________________________________________________________________________________________________________________

1. Purchase of Material
Purchases A/c Store Ledger Control A/c Store Ledger Control A/c
To Cash / Creditors A/c To General Ledger Control A/c To Cash / Creditors A/c
___________________________________________________________________________________

2. Purchases Return
Cash / Creditors A/c General Ledger Control A/c Cash / Creditors A/c
To Purchases Returns A/c To Store Ledger Control A/c To Store Ledger Control A/c
___________________________________________________________________________________

3.Purchase of Material Purchase A/c Work in Progress Control A/c Work in Progress Control A/c
for specific jobs 1 To Cash / Creditors A/c To General Ledger Control A/c To Cash / Creditors A/c
___________________________________________________________________________________

4. Payments to Creditors
Creditors A/c No Entry Creditors A/c
To Cash / Bank A/c To Cash / Bank A/c
___________________________________________________________________________________

5.Issue of Direct Material No Entry Work in Progress Control A/c Work in Progress Control A/c
to Production To Store Ledger Control A/c To Store Ledger Control A/c
___________________________________________________________________________________

6.Return of Direct Material No Entry Store Ledger Control A/c Store Ledger Control A/c
to Store To Work in Progress Control A/c To Work in Progress Control A/c
___________________________________________________________________________________

7.Issue of Indirect Material No Entry Factory Overheads Control A/c Factory Overheads Control A/c
to Productions / Factory To Store Ledger Control A/c To Store Ledger Control A/c
___________________________________________________________________________________

8.Return of Indirect Material No Entry Store Ledger Control A/c Store Ledger Control A/c
to Store To Factory Overheads Control A/c To Factory Overheads Control A/c
___________________________________________________________________________________

(1)
 Material Related Transactions

9.Transfer of Material from No Entry Transferee Job A/c No Entry

one job to another job2 To Transferor Job A/c
___________________________________________________________________________________

10. Normal Loss of Material No Entry Factory Overheads Control A/c Factory Overheads Control A/c
in Store3 To Store Ledger Control A/c To Store Ledger Control A/c
___________________________________________________________________________________

11. Abnormal Loss / Theft / Shortage Profit & Loss A/c* Costing Profit & Loss A/c Profit & Loss A/c
of Material in Store Purchase A/c To Store Ledger Control A/c To Store Ledger Control A/c

Wages Related Transactions

# Transaction Financial Accounting Non Integrated Accounting Integrated Accounting
__________________________________________________________________________________________________________________________________________________________

1. Wages paid or unpaid

Wages A/c Wages Control A/c Wages Control A/c
To Cash or O/s Wages A/c To General Ledger Control A/c To Cash or O/s Wages A/c
___________________________________________________________________________________

2.Direct Wages allocated No Entry Work in Progress Ledger Control A/c Work in Progress Control A/c
to Production / Factory To Wages Control A/c To Wages Control A/c
___________________________________________________________________________________

3. Indirect Wages allocated No Entry

Factory Overheads Control A/c Factory Overheads Control A/c
to various Departments Office Overheads Control A/c Office Overheads Control A/c
Selling Overheads Control A/c Selling Overheads Control A/c
To Wages Control A/c To Wages Control A/c
_______________________________________________________________ ____________________

4. Abnormal Loss of Time No Entry Costing Profit & Loss A/c Profit & Loss A/c
To Wages Control A/c To Wages Control A/c

Direct Expenses Related Transactions

# Transaction Financial Accounting Non Integrated Accounting Integrated Accounting

__________________________________________________________________________________________________________________________________________________________

1. Direct Expenses incurred

Expense (Name) A/c Direct Expenses Control A/c Direct Expenses Control A/c
To Cash or O/s Exp. A/c To General Ledger Control A/c To Cash or O/s Exp. A/c
___________________________________________________________________________________
2. Direct Expenses allocated No Entry Work in Progress Control A/c Work in Progress Control A/c
to Production To Direct Expenses Control A/c To Direct Expenses Control A/c
__________________________________________________________________________________________________________________________________________________________

(2)
 CA. Naresh Aggarwal’s Classes
Financial Accounting • Corporate Accounting • Cost Accounting • Financial Management www.youtube.com/canareshin

Overheads / Indirect Expenses Related Transactions

# Transaction Financial Accounting Non Integrated Accounting Integrated Accounting
__________________________________________________________________________________________________________________________________________________________

1. Indirect Expenses incurred Expense (Name) A/c

Factory Overheads Control A/c Factory Overheads Control A/c
in cash or not paid To Cash or O/s Exp. A/c
Office Overheads Control A/c Office Overheads Control A/c
Selling Overheads Control A/c Selling Overheads Control A/c
To General Ledger Control A/c To Cash or O/s Exp. A/c
_______________________________________________________________ ____________________

2.Factory Overheads No Entry Work in Progress Control A/c Work in Progress Control A/c
allocated to production To Factory Overheads Control A/c To Factory Overheads Control A/c
___________________________________________________________________________________

3.Administration Overheads No Entry Finished Goods Control A/c Finished Goods Control A/c
allocated to Finished Goods To Office Overheads Control A/c To Office Overheads Control A/c
___________________________________________________________________________________

4.Selling Overheads No Entry Cost of Sales A/c Cost of Sales A/c

allocated to Cost of Sales To Selling Overheads Control A/c To Selling Overheads Control A/c
___________________________________________________________________________________

5.Over Absorption of No Entry Overhead Control A/c (Name) Overhead Control A/c (Name)
any Overheads To Costing Profit & Loss A/c To Profit & Loss A/c
___________________________________________________________________________________

6.Under Absorption of No Entry Costing Profit & Loss A/c Profit & Loss A/c
any Overheads To Overhead Control A/c (Name) To Overhead Control A/c (Name)
___________________________________________________________________________________

7.Abnormal Loss of Product Profit & Loss A/c* Costing Profit & Loss A/c Profit & Loss A/c
or Accidental Losses Trading A/c To Work in Progress Control A/c To Work in Progress Control A/c
___________________________________________________________________________________

8. Sale of Scrap of Material Cash A/c General Ledger Control A/c Cash A/c
To Sales of Scrap A/c To Work in Progress Control A/c To Work in Progress Control A/c
__________________________________________________________________________________________________________________________________________________________

(3)
 CA. Naresh Aggarwal’s Classes
Financial Accounting • Corporate Accounting • Cost Accounting • Financial Management www.youtube.com/canareshin

Other Transactions related with Transfer and Sales

# Transaction Financial Accounting Non Integrated Accounting Integrated Accounting
__________________________________________________________________________________________________________________________________________________________

1.Transfer of Cost from WIP No Entry Finished Goods Control A/c Finished Goods Control A/c
to Finished Goods To Work in Progress Control A/c To Work in Progress Control A/c
___________________________________________________________________________________

2.Transfer of Cost from F.G. No Entry Cost of Sales A/c Cost of Sales A/c
to Cost of Sales To Finished Goods Control A/c To Finished Goods Control A/c
___________________________________________________________________________________

3.Transfer of Cost of Sales No Entry Costing Profit & Loss A/c Profit & Loss A/c
to Costing Profit and Loss A/c To Cost of Sales A/c To Cost of Sales A/c
___________________________________________________________________________________

4. Sale of Finished Goods Cash / Debtors A/c General Ledger Control A/c Cash / Debtors A/c
To Sales A/c To Costing Profit & Loss A/c To Profit & Loss A/c
__________________________________________________________________________________________________________________________________________________________
1
This transaction may also be recorded by drafting journal entry (1) and (5) stated above. General Ledger Control A/c is also known as Cost Ledger Control A/c
2
This tranansaction is recorded only in the subsidiary books of the costing department. or Nominal Ledger Control A/c or General Ledger Adjustment A/c
3
If the normal loss occures after issue of material to production, then no any journal entry is required.

(4)