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Integrated Accounting System

Integrated accounting system keeps cost and financial accounts in a single set of books, eliminating separate costing and financial records. This provides all the information needed for costing products and services as well as for financial accounts. It allows for cost analysis and preparation of profit/loss statements and balance sheets. Benefits include eliminating reconciliation between separate records and reducing duplication of work, ensuring accurate cost and financial data. Key accounts maintained include stock, cost of sales, assets, debtors/creditors, expenses, cost centers, and cash. Non-integrated accounting keeps separate ledgers for cost and financial accounts, restricting cost accounts to production-related transactions.

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Mohammed Arsiwala
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914 views2 pages

Integrated Accounting System

Integrated accounting system keeps cost and financial accounts in a single set of books, eliminating separate costing and financial records. This provides all the information needed for costing products and services as well as for financial accounts. It allows for cost analysis and preparation of profit/loss statements and balance sheets. Benefits include eliminating reconciliation between separate records and reducing duplication of work, ensuring accurate cost and financial data. Key accounts maintained include stock, cost of sales, assets, debtors/creditors, expenses, cost centers, and cash. Non-integrated accounting keeps separate ledgers for cost and financial accounts, restricting cost accounts to production-related transactions.

Uploaded by

Mohammed Arsiwala
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
  • Integrated Accounting System: An overview of integrated accounting systems, focusing on the processing of financial accounts and related benefits.
  • Working Mechanics of Integrated Accounting System: Discusses how the integrated accounting system operates, detailing account mechanics and processing methodologies.

Integrated Accounting System

From Wikipedia, the free encyclopedia

Jump to: navigation, search Integrated (OR Integral) Accounting System - Integrated Accounts is the name given to a system of accounting, whereby cost and financial accounts are kept in the same set of books. Obviously, then there will be no separate sets of books for Costing and Financial records. Integrated accounts provide or meet out fully the information requirement for Costing as well as for Financial Accounts. For Costing it provides information useful for ascertaining the Cost of each product, job, process, operation of any other identifiable activity and for carrying necessary analysis. Integrated accounts provide relevant information which is necessary for preparing profit and loss account and the balance sheets as per the requirement of law and also helps in exercising effective control over the liabilities and assets of its business. Non-integrated Accounting SystemeditBenefits

from Integrated

Accounting System
01.As only one set of accounting records is kept, the need of reconciliation between the profits shown by the two records is eliminated 02.The duplication of works is eliminated, thus the cost of operating this system is reduced. 03.There is a cross checking of various figures in cost as well as financial accounts. This ensures accuracy of figures of cost and financial data.

[edit] Working Mechanics of Integrated Accounting System


The following accounts are normally maintained under this system. 1.Stock Control Accounts (a)Raw Materials (b)Work-In-progress (c)Finished Goods 2.Cost of Sales Accounts 3.Assets Accounts 4.Debtors and Creditors Control Account 5.Prepaid Expenses and Outstanding Expenses Account 6.Direct wages and Overhead Costs Control Accounts 7.Cost Centre Account 8.Cash Account

Non-integrated Accounting System - is a system of accounting under which separate ledgers are maintained for cost and financial accounts by Accountants. Under such a system the cost accounts restricts itself to recording only those transactions which relate to the product or service being provided. Hence items of expenses which have a bearing with sales

or, production or for that matter any other items which are under the factory management are the ones dealt with in such accounts. This leads to the exclusion of certain expenses like interest and, bad debts and revenue/income from other than the sale of product or service. A special feature of the non-integrated system of accounts is its ability to deal with notional expenses like rent or interest on capital tied up in the stock. The accounting of notional rent facilitates comparisons amongst factories (some owned and some rented). Similarly, recognition of interest on capital tied up in stock could help make the stores and works managers aware of the money being blocked because of holding stock

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