Theory

Chapter (unit) Theory(marks)

1. Company 1
2. Shares 1
3. Financial statement 1
4. Accounting for material 2+1
5. Accounting for labor 1
6. Cost accounting 5+1 =6 marks
7. Computer 5+1 = 6marks
8. Accounting for overhead 1
Total 20
Unit 1: Accounting for company (sDkgL ;DalGw n]vf): 1 marks theory
Company (sDkgL):
A Company is an artificial person created by law for earning profit. The companies in Nepal are established by company Act 2063 B.S. ;femf nIo xfl;n
ug{sf nflu jf gfkmf cfh{g ug{sf nflu b'O{ jf b'O{ eGbf al9 AolStx? ldn]/ b]zsf] sfg'g adf]lhd :yfkgf ul/Psf] ;Fu7gnfO{ sDkgL elgG5 . g]kfndf sDkgL P]g @)^# cg';f/ sDkgL btf{ ug]{ k|rng
/x]sf] 5 .
Features of a Company (sDkgLsf laz]iftfx?):
The features of company are shown or presented below,
(sDkgLsf laz]iftfx? lgDg cg';f/ 5g\)
a) An Artificial Person (s[ltd AolSt): Like a person Company can buy and sell the properties in its own name. So, an artificial person is a feature
of a company. sDklgNf] dflg;n] h:t} cfkm\gf] gfddf /x]sf] ;DkQL laqmL ug{ ;S5 / cfkm\gf] gfddf ;DkQLx? Vfl/b ug{ ;S5, To;}n] s[ltd AolSt sDklgsf] Pp6f dxTjk'0f{ laz]iftf
dflgG5 .
b) Common Seal (;femf 5fk): A common seal is an official signature of company. All activities of a company are authorized by this common seal.
So, common seal is a feature of a company. ;femf 5fk sDklgdf sfo{nosf] x:tfIf/ (official signature) xf] . sDklgdf ;Dk'0f{ sf/f]af/x?sf] a}wflgstf nflu sDklgn]
cfkm\gf] 5fk k|of]u ub{5 . sDklgsf] ;femf 5fk k|of]u gePsf sf/f]af/x?n] a}wflgstf jf sfg'gL dfGotf kfpb}gg\ . To;}n] ;femf 5fk klg sDklgsf] Pp6f dxTjk'0f{ laz]iftfdf kb{5.
c) Voluntary Associations (:j]Rl5s ;Fu7g): A company is a voluntary association. No one can force to come and leave the business. Therefore, it
is regarded as a voluntary association of persons. sDklgaf6 s'g} klg ;]o/ ;b:ox?nfO{ 5f8\g / sDklgdf k|a]; ug{ s;}nfO{ bafj lbg gldNg] ePsf]n] sDklgnfO{ :j]Rl5s
;Fu7g dflgG5 .
Types of a Company (sDklgsf] k|sf/x?)
On the basis of number of members or public participation, a company can be classified into two types. They are:
Private Company lglh sDklgM
The company which can be established with minimum one member to maximum 101 member is called private company. It has the words 'Private
Limited' at the end of its name. Private company cannot issue share to general public. Ps hgf ;]o/ ;b:on] jf al9df !)! z]o/ ;b:o ;Dd ldn]/ :yfkgf ul/Psf] sDklgnfO{
lglh sDklg elgG5. o; lsl;dsf] sDklg ! hgf AolStn] klg :yfkgf ug{ ;S5. o; sDklgsf] gfdsf] k5fl8 k|f ∙ln∙ eGg] zAb n]lvPsf] x'G5 . o:tf] sDklgn] ;a{;fwf/0f hgtfx?nfo{ ;]o/ laqmL ug{
kfpb}g .
Public Company;fj{hlgs sDklgM
The company which can be established with minimum seven members to maximum is unlimited is called public company. It has only the word 'Limited'
at the end of its name. Public company can issue share to general public. clwstd ;]o/ :f+Vof gtf]lsPsf] / sDtLdf & ;ft hgf ;]o/ ;b:o x'g] ul/ :yfkgf ul/Psf] sDklgnfO{
;fj{hlgs sDklg elgG5. o; sDklgsf] gfdsf] k5fl8 ln∙ eGg] zAb n]lvPsf] x'G5. o:tf] sDklgn] ;a{;fwf/0f hgtfx?nfo{ ;]o/ laqmL ug{ kfpb5 .
Main document of company (sDklgsf k|d'v k|n]v jf k|df0fkqx?)
Memorandum of association (k|aGwkq): Memorandum of Association is the main document of company which contains the constitution and activities
of a company. This document contains name of the company, address of the company, objectives of the company and other activities.
sDklgsf] gfd, 7]ufgf, p2]Zo, k"Flh Pad\ cGo cfjZos s'/fx? pNn]v ul/Psf] k|n]vnfO{ k|aGwkq elgG5 . of] sDklgsf] d"n sfg'g xf] .
Articles of association (lgodfjnL): Article of Association is one of the important documents of a company which contains rules and regulations for the
internal management of a company. sDklgsf] cfGtl/s lqmofsnfk Aojl:yt ?kdf ;Frfng ug{sf nflu agfOPsf] gLlt lgodnfO{ lgodfjnL elgG5 . o; lgodfjnLdf sDklgsf] cfGtl/s
Aoj:yfkg / p2]Zo k'/f ug{ ul/g] sfo{sf] af/]df lj:t[t ?kdf AofVof ul/Psf] x'G5 .
Prospectus (laj/0fkq): A prospectus is a document issued by a public company to the public inviting to purchase shares or debentures. It is an invitation
or notice or advertisement to the public to purchase shares or debentures of the company. sDklgn] cfkm\gf] ;]o/ / C0fkq vl/b ug{ ;a{;fwf/0f hgtfx?nfO{ hfgsf/L
lbg jf cfx\jfg ug{ tof/ kfl/Psf] b:tfj]h jf kqnfO{ laj/0fkq elgG5 . ;]o/ / C0fkq vl/bstf{nfO{ nufgL ug{ cfdGq0f ug]{ b:tfj]h jf kqnfO{ laj/0fkq elgG5 .
Share and share capital of a company (sDklgsf] ;]o/ / ;]o/ k"FhL) [1 marks]
Share (;]o/): Share is the small part of capital which reflects ownership in the company.
Total capital of a company is divided into certain units of fixed amount. These units are called share. sDklgsf] s'n k"FlhnfO{ ;
;fgf] efudf laefhg ul/Psf] x'G5, Tolx Pp6f ;fgf] efu af cFz nfO{ ;]o/ elgG5 . ;]o/ eg]sf] k"FhLsf] Pp6f ;fgf] efu xf], h;n] sDklg dflYf clwsf/ tyf :jfldTjsf] k|ltlglwTj u/fpFb5 .
Share capital (;]o/ k"FhL): The capital collected by the company by issuing share is called share capital. In other words, capital
invested by shareholders is called share capital. sDklgn] ;]o/ lalqm u/]/ ;Fsng u/]sf] kF"lhnfO{ ;]o/ k"Flh elGfG5 . csf]{ zAbdf ;]o/wlgx?n] sDklgdf nuflg u/]sf] jf
nufPsf] /sdnfO{ ;]o/ k"Flh elGfG5 .
Types of share (;]o/sf] k|sf/x?):
a) Equity share (;fwf/0f ;]o/): The share which has voting right but no fixed dividend is called equity share. It is also
known as common stock or ordinary share. Dftbfg ug]{ clwsf/ ePsf] t/ nfEffFz eg] lglZrt gePsf] ;]o/ nfO{ ;fwf/0f ;]o/ elgG5 . o;nfO{ Common
stock or ordinary share klg elgG5 .
b) Preference share (cu|lwsf/ jf k"af{lwsf/ ;]o/): The share which has fixed dividend but no voting right is called preference
share. It is also known as preferred stock. Dftbfg ug]{ clwsf/ gePsf] t/ nfEffFz eg] lglZrt ePsf] ;]o/ nfO{ k"af{lwsf/ ;]o/ elgG5 . o;nfO{ Preferred
stock klg elgG5 .
Types of share capital (;]o/ k"FhLsf k|sf/x?):
a) Authorized share capital (clws[t ;]o/ k"Flh): Capital which is mentioned in the memorandum of association as the maximum amount of
share capital is called authorized share capital. It is also known as registered share capital. sDklgsf] Kf|aGwkqdf pNn]v ul/Psf] clwstd ;]o/ k"FlhnfO{
clws[t ;]o/ k"Flh elgG5 . o;nfO{ Registered share capiltal klg elgG5 .
b) Issued share capital (hf/L ;]o/ k"Flh): Issued share capital is a portion of authorized share capital which is issued to the public for subscription.
clws[t ;]o/ k"Flh dWo]af6 ;a{;fwf/0f hgtfx?nfO{ lalqmlat/0f ug{sf nflu 5'6 \ofOPsf] ;]o/ k"FlhnfO{ hf/L ;]o/ k"Flh elgG5 .
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 c) Subscribed share capital (cfa]lbt ;]o/ k"Flh): A part of issued share capital which is applied by the public is called subscribed share capital. This
capital may be less than, equal to and more than issued share capital. ;a{;fwf/0f hgtfx?nfO{ lalqmlat/0f ug{sf nflu 5'6\ofOPsf] ;]o/ k"Flh dWo] hgtfx?n] dfu
ubf{ cfab]g lbPsf] k"FlhnfO{ cfa]lbt ;]o/ k"Flh elGfG5 . of] ;]o/ k"Flh hf/L ;]o/ k"Flh eGbf w]/}, yf]/} / a/fa/ klg x'g ;S5 .
d) Called up share capital (dfu ul/Psf] ;]o/ k"Flh): Call up share capital is amount of capital which is collected from the shareholder in different
installment in different period. ;]o/wlgx?af6 sDklgn] laleGg ;dodf ls:tf, ls:tfdf dfu u/]/ ;Fsng u/]sf] k"FhLnfO{ dfu ul/Psf] ;]o/ k"FhL elgG5 .
e) Paid up share capital (r'Stf ;]o/ k"Flh): Paid up share capital is the portion of called up share capital which has been actually received from the
shareholder. Paid up share capital = (called up share capital - call in arrears) sDklgn] laleGg ;dodf ls:tf, ls:tfdf dfu u/]/ ;]o/wlgx?af6 jf:tlas k|fKt
ePsf] k"FhLnfO{ r'Stf ;]o/ k"FhL elgG5 . sDklgn] laleGg ls:tfx?df ;]o/sf] /sd dfu ul/;s]kl5 ;]o/wlgx?n] sDkgLnfO{ af:tljs a'e mfPsf] /sdnfO{ jf k"FhLnfO{ r'Stf ;]o/ k"FhL elgG5
.
f) Reserve share capital (hu]8f ;]o/ k"Flh): It is that part of uncalled capital which has been reserved by the company by passing a special resolution
to be called only in the event of its liquidation. sDklg la36gdf uPsf] cj:yfdf dfq afFsL /x]sf] /sd dfu ug]{ ;fwf/0f ;efdf laz]if k|:tfj kfl/t ul/Psf] 5 eg] dfu
gul/Psf] k"FhLnfO{ hu]8f ;]o/ k"FhL elgG5 .
Accounting for labour >d ;DalGw n]vf (1marks theory):
Time rate system (;dob/ k|0ffnL): The system making payment of wages according to the time spent or time taken by the worker is called time rate system.
s'g} klg AolStnfO{ jf sfdbf/nfO{ Hofnf lbFbf sfd u/]sf] ;odsf] cfwf/df Hofnf lbOG5, eg] To;nfO{ ;do b/ k|0ffnL elgG5 .
Advantage (kmfObf):
Accepted by labour unions >d ;Fu7g 4f/f l:jsfo{ .
Quality production u'0f:tl/o pTkfbg .
Disadvantage (a]kmfObf):
No incentive to the efficient workers. kl/>dL >ldsx?nfO{ k|f]T;fxg gx'g' .
High cost of supervision. pRr ;'kl/a]If0f nfut .
Piece rate system (sfo{b/ k|0ffnL):The system making payment of wages according to the unit of output produced by the worker is called piece rate system.
s'g} klg AolStnfO{ jf sfdbf/nfO{ Hofnf lbFbf p;n] pTkfbg u/]sf] pTkfbg kl/df0fsf] cfwf/df Hofnf lbOG5, eg] To;nfO{ sfo{ b/ k|0ffnL elgG5 .
Advantage (kmfObf):
Incentive to the efficient workers. Afl9 sfo{ ug]{ >ldsnfO{ k|f]T;fxg .
High production pRr pTkfbg .
Disadvantage (a]kmfObf):
Less attention to quality. U'f0f:t/df sd Wofg .
Rejected by labour union. >d ;Fu7g 4f/f cl:js[t .
Labour cost (>d nfut): Labour cost is the remuneration given to the employees or workers for their mental and Physical Contribution to produce goods
and services.
Af:t' pTkfbg ug]{ jf ;]jf k|bfg ug]{ sfo{df hGfzlStnfO{ jf sfdbf/nfO{ k|bfg ul/g] cfly{s / u}/ cfly{s ;'ljwfx?nfO{ >d nfut elgG5 .
Direct labour cost (k|ToIf >d nfut): Direct labour cost is the remuneration of the employees or workers who are directly involved with the manufacturing
operations. Af:t' pTkfbg ug]{ jf ;]jf k|bfg ug]{ sfo{df k|ToIf ?kdf ;FnUg >ldsx?nfO{ k|bfg ul/g] Hofnf jf ;]jf ;'lawfx?nfO{ k|ToIf >d nfut elgG5 .
Indirect labour cost (ck|ToIf >d nfut): Indirect labour cost is the remuneration of the employees or workers who are not directly involved with the
manufacturing operations. Af:t' pTkfbg ug]{ jf ;]jf k|bfg ug]{ sfo{df k|ToIf ?kdf ;FnUg gePsf >ldsx?nfO{ k|bfg ul/g] Hofnf jf ;]jf ;'lawfx?nfO{ ck|ToIf >d nfut elgG5 .
Importance of labour cost >d nfut sf] dxTjx? M
It helps to fix the selling price of goods and services. o;sf] d2taf6 laqmL d'No lgwf{/0f ug{ ;lhnf] x'G5 .
It helps to control the cost. o;sf] ;xof]un] nfut lgoGq0f ug{ ;lsG5 .
Features of a good system of wages payment c;n Hofnf k|0ffnLsf laz]iftfx?M
a) Suitable for both employer and employee Hofnf k|0ffnL ;Fu7g / >lds b'a}sf] nflu pko'St x'g' kb{5.
b) Accetpted by trade union Hofnf k|0ffnL >d ;Fu7g 4f/f :jLsfo{ x'g' kb{5 .
Labour cost control and its need: >d nfut lgoGq0fsf] cjwf/0ff / cfjZostfM
>d ;DaGWfL nfut cgfjZos ?kdf a9\g glbg'nfO{ >d nfut lgoGq0f elgG5 . csf]{ zAbdf ;s] ;Dd Go"gtd >d nfutdf nIo cg';f/ pTkfbg xfl;n ug'{nfO{ >d nfut lgoGq0f elgG5 . labour cost
control is the process of preparing records of employees and colleting cost data incurred in workforce activities. Labour cost control involves employment
of efficient workers, proper training of workers, proper time keeping and time booking and proper accounting for the wages paid to them.
State the advantages/importance/need of labor cost control. >d nfut lgoGq0fsf kmfObfx? n]Vg'xf]; .
The advantage of labor cost control are as follows >d nfut lgoGq0fsf kmfObfx? lgDgfg';f/ 5g\M
a. Minimizes the labor cost >d nfutdf sdL cfpF5 .
b. Creates good working environment c;n sfo{ jftfj/0fsf] ;[hgf x'G5 .
c. Increases quality of job sfdsf] u'0f:t/df j[l4 x'G5 .
>d nfut lgoGq0fdf ;FnUg laefux? Department involved in labour cost control:
sDf{rf/L laefu Personnel department:
>lds tyf sd{rf/Lx?sf] eg{f, 5gf}6, kb:yfkgf, kfl/>lds lgoGq0f, ;?jf, a9'jf / cjsfz ;DaGwL th'{df ul/Psf gLltx? sfo{Gjog u/fpg] lhDd]jf/L ePsf] laefunfO{ sd{rf/L laefu elgG5 . The
department which is responsible for managing and processing payroll, as well as maintaining employee records related to salary, benefits,
recruitment, selection, training, transfer, promotion and taxes is called personnel department.
Engineering department OGhLlgol/ª laefuM
sfo{ cj:yf / pTkfbg lalwx?sf] cWoog u/L >d nfut lgoGq0fdf ;xof]u ug]{ laefunfO{ OGhLlgol/ª laefu elgG5 .
The department which is responsible for managing and accounting for the costs associated with the company's engineering activities is called
engineering department. The department which is responsible to perform all the activities started from putting input in production process to
getting output is called engineering department.
Rate or Time and motion study department b/, ;do / ult cWoog laefuM
>d / oGq ;Frfngsf] ;do Pad\ ultsf] cWoog ug]{, sfo{ laZn]if0f ug]{ / Hofnf lgwf{/0f ug]{ laefunfO{ b/, ;do / ult cWoog laefu elgG5 .
The department that is primarily concerned with the task of making of time and motion studies of labor and plant operations, job analysis and
setting wage rates is called the rate or time and motion study department.
Time-keeping department ;do clen]vg laefuM
sfddf ;FnUg ePsf >ldsx?sf] ;dosf] clen]v /fVg] lhDd]jf/L ePsf] laefunfO{ ;do clen]vg laefu elGfG5 .
The department which is responsible recording the hours worked by employees, as well as any overtime is called time-keeping department.

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 Payroll department kfl/>lds laefuM
>ldsn] sfo{ ;Dkfbg ubf{ nfu]sf] ;do ?h' ug]{, Hofnf lgwf{/0f ug]{, Hofnf e'StfgL laj/0f tof/ ug]{ / Hofnf lat/0f ug]{ laefunfO{ kfl/>lds laefu elgG5 . The department which is
responsible for verification of time spent by each worker, calculation of wage payable to each worker, preparation of payroll and disbursement of
wages to worker is called payroll department.
Cost accounting department nfut n]vf laefuM
>d ;DaGwL nfutx? ;Fsng ug]{, clen]v /fVg] / laZn]if0f ug]{ sfo{df ;FnUg laefunfO{ nfut n]vf laefu elGfG5 .
The department which is responsible for the accumulation, classification and analysis for labour cost is called cost accounting department.
Accounting for Overhead pkl/Aoo ;DalGw n]vf 1 marks
1. Write in short the meaning of overhead.
pkl/Joosf] cy{ 5f6s/Ldf n]Vg'xf];\ .
Overhead is the aggregate of all indirect costs such as indirect material, indirect wage and other indirect expenses. Overhead cost cannot be easily
identified with a particular cost unit. pkl/Joo ck|ToIf ;fdu|L ,ck|ToIf >d / cGo ck|ToIf vr{ h:tf ck|ToIf nfutx?sf] s'n of]u xf] . pkl/Joosf] /sdnfO{ lglZrt PsfO{ jf nfut
s]Gb|lar ;lhn} klxrfg ug{ ;lsb}g .
2. What do you understand by allocation of overhead? Write in brief.
pkl/Joosf] afF8kmfF8 eGgfn] s] a'em\g'x'G5 < 5f]6s/Ldf n]Vg'xf];\ .
Allocation of overhead is the process of charging whole overhead cost to a particular department . In other words, it is the allotment of an overhead
cost to a particular cost unit. pkl/Joosf] afF8afF8 eg]sf] s'n pkl/Joo nfutnfO{ lglZrt ljefu jf nfut s]Gb|df pNn]v ug]{ k|lj|mof xf] . csf]{ zAbdf of] pkl/Joo nfutnfO{ lglZrt nfut
PsfOdf afF8kmfF8 ug]{ sfo{ xf] .
3. What do you understand by apportionment of overhead? Write in brief.
pkl/Joosf] ;+ljefhg eGgfn] s] a'em\g'xG5 < 5f]6s/Ldf n]Vg'xf];\ .
Apportionment of overhead is the process of distributing an overhead cost to several departments. pkl/Joosf] ;+ljefhg eg]sf] pkl/Joo nfutnfO{ laleGGf laefu
jf nfut s]Gb|x?ljrdf ljt/0f ug]{ k|lj|mof xf] . csf]{ zAbdf , of] pkl/Joo nfutnfO{ ljleGg nfut PsfO{ jf nfuts]Gb|x? ljefhg ug]{ k|lj|mof xf] .
4. What do you understand by absorption of overhead? Write in brief.
pkl/Joosf] ;dfj]z eGgfn]] s] a'em\g'x'G5 < 5f]6s/Ldf n]Vg'xf];\ .
Absorption of overhead is the process of charging the overhead of a department to different product. In other words, it the process of sharing of
overhead by all products. s'g} Pp6f nfut s]Gb| jf ljefusf] pkl/JoonfO{ ljleGg nfut PsfO{ jf a:t'ljr ;dfj]z ug]{ k|lj|mofnfO{ pkl/Joosf] ;dfj]z elGfG5 . csf]{ zAbdf ,of] pkl/JoonfO{
ljefusf ;a} a:t' jf sfo{x?lar efu nufpg] k|lj|mof xf] .
5. Classify overhead on the basis of element.
tTjsf] cfwf/df pkl/Joosf] jlu{s/0f ug'{xf];\ .
Overhead on the basis of element can be classified into following three types TfTjsf] cfwf/df pkl/JoonfO{ lgDg ltg Kf|sf/df juL{s/0f ug{ ;lsG5MM
a. Indirect materials ck|ToIf ;fdu|L: The materials which cannot be identified with a particular cost unit or center is called indirect material.
They do not form the major component of finished product. lglZrt nfut PsfO{ jf s]Gb|df ;lhn} klxrfg ug{ g;lsg] ;fdu|LnfO{ ck|ToIf ;fdu|L elgG5 . logLx?
clGtd tof/L j:t'sf] k|d'v cª\u aGb}gg\ .
b. Indirect Labor ck|ToIf >dM: Indirect labor is the amount of wages paid to the workers who are not directly engaged in the production
process. pTkfbg k|lj|mofdf k|ToIf ;+nUg gx'g] sfdbf/x?nfO{ e'QmfgL ul/Psf] Hofnf /sdnfO{ ck|ToIf >d elgG5 .
c. Indirect expenses ck|ToIf vr{: It is the expenses other than indirect materials and indirect labor. It cannot be identified with a particular
cost unit. ck|ToIf ;fdu|L / ck|ToIf >db]lv afx]ssf vr{x?nfO{ ck|ToIf vr{ elgG5 . o;nfO{ klg lglZrt PsfO{ jf nfut s]Gb|lar klxrfg ug{ ;lsb}g .
6. Classify overhead cost according to function.
pkl/Joo nfutnfO{ sfo{sf cfwf/df juL{s/0f ug'{xf]; .
According to function, overhead cost can be classified into following three types sfo{sf cfwf/df pkl/Joo nfutnfO{ lgDg ltg k|sf/df juL{s/0f ug{ ;lsG5:
a. Manufacturing overhead pTkfbg pkl/JooM: The indirect expenses which are incurred in carrying out manufacturing activities of the concern
are known as manufacturing overhead. ;+:yfdf pTkfbgd"ns ultlalwx? ;~rfng ubf{ j]xf]g'{kg]{ cKf|ToIf vr{x?nfO{ pTkfbg pkl/Joo elgG5 .
b. Office and Administrative overhead sfof{no tyf k|zf;lgs pkl/Joo: The indirect expenses which are incurred in day to day office and
administrative activities of the concern are called administrative overhead. ;F+:yfdf b}lgs sfof{no tyf k|zf;lgs ultljlwx? ;~rfng ubf{ a]xf]g'{kg]{ ck|ToIf
nfutnfO{ sfof{no tyf k|zf;lgs pkl/Joo elgG5 .
c. Selling and distribution overhead ljj|mL ljt/0f pkl/Joo: The indirect expenses which is incurred for selling and distribution activities of the
concern is called selling and distribution overhead. ;+:yfsf] laqmL ljt/0f ultljlw ;~rfng ubf{ a]xf]g'{kg]{ nfutnfO{ ljj|mL ljt/0f pkl/Joo elgG5 .
7. Give the meaning of fixed overhead with appropriate example.
pko'St pbfx/0f ;lxt l:y/ pkl/Joosf] cy{ n]Vg'xf];\ .
Fixed overhead is the cost which remain fixed or constant is total in the change in volume of activity. Rent, salary, depreciation, legal expenses,
bank charge, interest etc are the examples of fixed overhead. ;+:yfsf] pTkfbgsf] dfqf jf ultljlwdf kl/jt{g ePklg s'n /sd l:y/ /xg] pkl/JoonfO{ l:y/ pkl/Joo elgG5 .
ef8f, tna, x|f;, sfg'gL vr{ , a}ª\s b:t'/ , Jofh cflb l:y/ pkl/Joosf pbfx/0f x'g\ .
8. What you understand by variable overhead? kl/jt{gzLn pkl/Joo eGGffn] s] j'Efm\g'x'G5 <
The overhead which changes directly with the volume of production and sales is called variable overhead. It increases in total with the increase in
volume of activity and vice versa. Indirect materials, indirect labor and power expenses etc. are the examples of variable overhead. pTkfbg / ljj|mLsf]
dfqf cg';f/ 36a9 x'g] cKf|ToIf nfutnfO{ kl/jt{gzLn pkl/Joo elgG5 . ck|ToIf ;fdu|L , ck|ToIf >d / kfj/ vr{ kl/jt{gzLn pkl/Joosf s]xL pbfx/0f x'g .
9. Define semi-variable overhead with suitable examples.
pko'St pbfx/0f;lxt cw{ kl/jt{gzLNf pkl/JoonfO{ kl/eflift ug'{xf];\ .
Semi variable overhead is a mixed type of overhead. It remains fixed upto a certain limit after which it becomes variable. It is neither completely
fixed nor variable. Telephone, elcectricity, heating and lighting, etc are the examples of semi-variable overhead. pTkfbgsf] Pp6f lglZrt laGb' ;Dd l:y/ /xGf]
;f] laGb' kl5 eg] a9\b} hfg] pkl/AonfO{ cw{ kl/jt{gzLn pkl/Joo elgG5 . .
10. Write the meaning of controllable and uncontrollable overhead.
lgoGq0fof]Uo / lgoGq0f cof]Uo pkl/Joosf] cy{ n]Vg'xf];\ .
Controllable overhead lgoGq0fof]Uo pkl/Joo: The overhead which can be controlled by the management of a manufacturing concern is called
controllable overhead. Indirect materials, power expenses and lighting are the example of controllable overhead. pTkfbgd'ns ;+:yfsf] Joj:yfkgjf6 lgoGq0f
ug{ ;lsg] pkl/JoonfO{ lgoGq0fof]Uo pkl/Joo elgG5 . ck|ToIf,;fdu|L,kfj/ vr{, tfk / Kf|sfz cflb lgoGq0fof]Uo pkl/Joosf pbfx/0f x'g .
Uncontrollable overhead lgoGq0f cof]Uo pkl/Joo: The overhead which cannot be controlled by the management of a manufacturing concern is known
as uncontrollable overhead. The fixed overheads like factory rent, depreciation, legal expenses etc are the examples of uncontrollable overhead.
pTkfbgd'ns ;+:yfsf] Joj:yfkgjf6 lgoGq0f ug{ g;lsg] pkl/JoonfO{ lgoGq0f cof]Uo pkl/Joo elgG5 . sf/vfgf ef8f, x|f;, sfg'gL vr{ cflb lgoGq0fcof]Uo pkl/Joosf pbfx/0f x'g .

3
n]vfljlwdf sDKo'6/ k|0ffnL Computer System in Accounting (5+1 =6 Marks)
sDKo'6/sf] cy{ Meaning of Computer: sDk'6/ eGgfn] ljleGg Kf|sf/sf] sfo{ ug{sf] nflu k|of]u x'g] Ps ljB'tLo d]l;g xf] . sDKo'/ k|of]u stf{n] lbPsf] cfut (Input) nfO{ k|zf]wg (Process)
u/L cy{k"0f{ pkh (Output) jf kl/0ffdsf] ?kdf JoSt ub{5. sDKo'6/df vf;u/L rf/ k|sf/sf] tTjx? /x]sf] x'G5g\M cfut (Input), :d[lt (Memory), CPU / pkh (Output) . A computer
is a multipurpose, electronic, programmable device that accepts inputs from the user, stores it and processes it to generate the refined output at
an enormous speed. It includes four major components: Input, Memory, CPU (Central Processing Unit) and output which requires software for
its operation.
n]vfljlwdf sDKo'6/ k|0ffnLsf] cy{ (Meaning of Computer System in Accounting)
n]vfljlwdf sDKo'6/ k|0ffnL eGgfn] sDKo'6/ k|0ffnLåf/f n]vf clen]vg sfod ug]{ sfo{nfO{ a'emfpF5 . o;cGtu{t sDKo'6/sf] xf8{j]o/ / ;ˆ6j]o/ sf] k|of]uåf/f n]vfsf sf/f]af/x?nfO{ clen]v /fVg]b]lv
k|ltj]bg tof/ kfg]{;Ddsf] sfd kb{5g\ . sDKo'6//fOh n]vfljlwn] n]vf;DaGwL ;ˆ6j]o/sf] dfWodaf6 k|ls|ofut ?kdf ljleGg k|sf/sf Jofj;flos sf/f]af/x?nfO{ cfut (Input) dfgL lgDg k|ltj]bg
tof/ ul/G5 .
 uf]Zjf/f ef}r/ (Days books/ Journal)
 axLvftf (Ledger)
 ;Gt'ng kl/If0f (Trial balance)
 ljQLo ljj/0fx? (Financial statements)
Computerized accounting system refers to the processing of accounting transaction through the use of hardware and software in order to produce
accounting records and reports. Computer system of accounting is a software program which collects, stores and analyzes the accounting data. A
company prepares accounting reports or statement with the help of accounting software.
The computerized accounting system collects, processes, analyzes and stores financial data of a company. Computerized accounting system takes
accounting transactions as inputs that are processed to generate the following reports:
 Day books/ Journals.
 Ledger.
 Trial balance.
 Balance sheet.
 Profit and loss account.
n]vfljlwdf sDKo'/ k|0ffnLsf tTjx?
Elements of Computer System in Accounting (CAS)
sDKo'6/ cfwf/Lt n]vfljlwsf ljleGg tTjx? x'G5g . tL lgDg k|sf/sf 5g\M
!= xf8{j]o/ (Hardware): n]vfljlwdf sDKo'6/ k|0fnLdf k|of]u x'g] ef}lts :j?kx? g} xf8{j]o/ xf] . xf8{j]o/ eGgfn] sDKo'6/,Nofk6k,lk|G6/,:sfg/, tyf kfj/ Backup h:tf ef}lts j:t' kb{5g\ .
the hardware of the computer is the physical components of a computer that includes computers, laptops, servers, Keyboard, Mouse, monitors,
printers, scanners, routers andbackup power supply used to operate the system.
@= ;ˆ6j]o/ (Software): sDkgL÷ Joj;fosf] ljlQo tYofª\sx?sf] e08f/0f, ?kfGt/0f tyf ljZn]if0f ug]{ u'0f:t/Lo tyf ljZj;gLo sDKo'6/ k|f]u|fd (Computer program) nfO{ ;ˆ6j]o/
elgG5 . Joj;fodf pknAw ;"rgfx?sf] cfwf/df JoJ:yfksnfO{ ;xL tyf u'0f:t/Lo lg0f{o Ifdtfsf] ljsf;sf] nflu ;ˆ6j]o/sf] k|of]u ljZj;gLo dflgG5 . Software is a collection of
programs that work with hardware. These are the computer programs that provide quality, reliability and security to the company's financial
data that may be stored, retrieved, processed and analyzed.
#= dflg; (People): n]vfljlwdf sDKo'6/ k|0ffnLdf k|of]u x'g] ljleGg JolStx?nfO{ dflg; (People) elgG5 . tL cfGtl/s k|of]ustf{ (Cashier, accountants, finance manager) x'g\ eg]
afXo k|of]ustf{ (Creditor, Consultants, Tax authorities) x'g\ . These are the user of the system. Internal users include accountants and other financial
officers of the company. Systems are also used by users outside the organization such as auditors, consultants, tax authorities, etc.
$= k|lj|mof (Procedure): o;cGtu{t :jrflnt ?kdf jf dflg;åf/f ;ª\sng ul/Psf] n]vf;Fu ;DalGwt tYosf] e08f/0f tyf ?kfGt/0f ug]{ lj|mofnfO{ k|lj|mof elgG5 . These include both
manual and automated methods for collecting, storing, retrieving and processing data.
%= tYofª\s (Data): ljQLo k|ltj]bg tof/ kfg{ rflxg] k|f/lDes n]vf;DaGwL sf/f]af/x? g} tYofª\s (Data) x'g\ . k|f/lDes ;DaGwL hfgsf/Lx? laj|mL tyf vl/b cfb]z , u|fxs lan ljj/0f, axLvftf,
df}Hbft Joj:yfkg ;DaGwL hfgsf/L cflb kb{5g\ . It refers to the information (transaction) relevant to the organization's business practices. It may include
sales orders, customer billing statements, sales analysis reports, purchase requisition, vendor invoices, general ledgers, inventory data, payroll
data, and tax data. These data can be used to prepare accounting statements and reports such as accounts receivable, depreciation, trial balance,
profit and loss and so on.
^= cfGtl/s lgoGq0f (Internal control): cfGtl/s lgoGq0f eGgfn] cgflws[t JolStaf6 sDKo'6/, Software tyf Server nfO{ hf]ufpg k|of]u x'g] Password jf Biometric klxrfgnfO{
a'emfpF5 . These are the security measures such as passwords, and biometric identification to protect sensitive data against unauthorized computer
access and to limit access only to authorized users. It also includes protection against computer viruses, hackers and other internal and external
threats to network security.
ljz]iftfx? (Features of Computer System in Accounting)
Joj:yfks tyf cGo k|of]ustf{x?nfO{ Joj;fosf] ljQLo cj:yf Jojl:yt ?kdf ;"rgf k|fjx ug{' Computerized n]vf k|0ffnL xf] . o;sf lgDg ljz]iftfx? /x]sf 5g\M
!= ;/n / PsLs[t (Simple and Integrated): CAS Joj;fosf pTkfbg , df}Hbft Joj:yfkg, j:t' laj|mL tyf vl/b h:tf ;"rgfx?nfO{ PsLs[t tyf :jrflnt ?kdf ;Dk|]if0f ub{5 . kmn:j?k
o; k|0ffnLn] Go"gtd nfutdf clwstd hfsf/L k|bfg ub{5 . CAS is designed to automate and integrate all the business operations such as purchase, sales, loan,
inventory and manufacturing.
@= ult (Speed): tYofª\s nfO{ sDKo'6/df k|of]u ul/g] x'Fbf o;n] pRr ultdf e08fl/t clen]vx? ;Dk|]if0f ub{5 . It can be perform functions at much higher speed than doing
the same manually.
#= z'4tf (Accuracy): sDKo'6/sf] k|of]u x'g] xf8{j]o/ tyf ;ˆ6j]o/n] clelnlvt hfgsf/Lx?nfO{ ;xL tyf lgikIf ?kdf hfgsf/L k|bfg ub{5 . Computers perform functions with high
degree of accuracy. If hardware, software and input by people are proper, the computerized accounting system can assure accurate outcomes.
$= e/kbf]{ (Reliability): sDKo'6/sf] dfWodaf6 clwstd tYofª\s e08f/0f ug{ ;lsG5 / ;f] e08fl/t tYofªsn] cfjZos k/]sf] ;dodf ljZjf;gLo ;"rgf k|bfg ub{5 .
the result culcualted using computer is reliable.
%= ax'd'vL (Versatility): sDKo'6/df n]vf;DaGwL ;ˆ6j]o/ k|of]u ul/g] x'Fbf dflg;n] Jofj;flos sf/f]af/x?nfO{ ef}r/ agfO{ k|ljli6 u/]kl5 cfjZos ljleGg k|l tj]bgx? agfpg ;Sb5 . h:t}
axLvftfx?, df}Hbft Joj:yfkg , ljQLo k|ltj]bh cflb . Computers and accounting software have the ability to perform diverse tasks.
dxTj (Importance)
lgDg k|sf/sf CAS sf] dxTjx? 5g\M
!= tLa| k|zf]wg (Faster Processing or High speed): dflg;n] ug]{eGbf tLj| ultdf sDKo'6/n] sfd ug{ ;Sg] ePsf] x'Fbf o;sf] k|ltlj|mof tLj| x'G5 . Computers requires far less
time than human beings in performing a particular task.
@= ;xL ;"rgf (Accurate Information): dflg;n] cfkm}F sfd ubf{ ef}r/ axLvftf ;a}df 5'6\6f5'6\6} clen]v ug'{kg]{ x'G5 . clen]vx?sf] 5'6km'6 x'g;S5 t/ sDKo'6/ k|0ffnLdf ef}r/ tof/ u/]kl5
cfkm}F cGo sfd ug]{ ePsf] x'Fbf q'6L /lxt hfgsf/L k|bfg ub{5 . There is less space for error because only one account entry is needed for each transaction unlike
repeated posting of the same accounting data in manual system.
#= ljZjfl;nf] (Reliability): sDKo'6/n] ysfO , em~em6 gdfGg] x'Fbf Ps} k|s[ltsf] sfddf klg k|efjsf/L tyf ljZjf;gLotfsf ;fy sfo{ ug{ ;lsG5.
The computer never gets tired and bored. The results obtained by computers are more reliable than human beings.

4
$= ;lhn} ;"rgf kfpg' (Easier Availability): Ps} ;dodf jf sd ;dodf ljleGg k|of]ustf{n] cfjZos hfgsf/L k|fKt ug{ ;Sb5 . o;df x:tlnlvt kmfOn e}mF vf]Hg'kg]{ emGem6 x'Fb}g . The
data are easily available and can be communicated to different users at the same time.
%= cBfjlws ;"rgf (Up to date information): ;ˆ6j]o/sf] dfWodaf6 s'g} klg k|sf/sf] tYofª\sdf km]/abn x'Fbf t?Gt To;n] k|efj kfg]{ vftfx?df o;n] k]m/abn ug]{ ub{5 . To;sf/0f o;sf]
;"rgfx? cBfjlw ug'{kg]{ x'G5 . : Account balances will always be up to date since the records are automatically updated as and when accounting data are
entered or stored.
;Ldfx? (Limitation)
CAS sf] lgDg k|sf/sf ;Ldfx? /x]sf 5g\M
!= h8fgdf clws nfut (High cost of installation): sDKo'6/ k|0ffnLsf] n]vfljlw eg]sf] ;ˆ6j]o/sf] cfwf/df /xg] x'Fbf ;ˆ6j]o/sf] nfut w]/} x'g ;S5, h'g ;fgf Joj;fosf] nflu dxª\uf] kg{
hfG5 . To:t} To;sf] ;~rfng, dd{t tyf Backup nfutklg dxFuf] kb{5 . The cost of installing the accounting software is expensive and may not be affordable to
all businesses.
@= tflndsf] nfut (Cost of training): of] n]vfljlw ;~rfng ug{ tflnd k|fKt JolStsf] cfjZostf x'G5 . ;do ;dodf ;ˆ6j]o/df ePsf] kl/jt{gsf] nflu ljz]if tflndsf] cfjZostf kb{5 . The
complex computerize accounting software generally require specialized operator. The user/ operator requires special training to ensure efficient
and effective use of updated software.
#= a]/f]huf/Lsf] ;Defjgf (Fear of unemployment): sDKo'6/sf] k|of]uåf/f n]vf clen]vg ubf{ dfgj ;+;fwgsf] Hofb} Go"g cfjZostf kb{5 . kn:j?k a]/f]huf/L x'g] ;Defjgf ;xG5 . Whenever
the manual accounting system is computerized, the fear of unemployment/ loss of job exists mainly to the existing accounting staffs. They may have
the perception of reduction of job in the market.
4. :Jff:Yodf c;/ (Health impact): Extensive use of computers may lead to many health problems such as eye strain, muscular complaints, back ache,
etc. resulting in reduction of work efficiency as well as increased medical expenditure. sDKo'6/sf] w]/} k|of]u ubf{ :jf:yodf c;/ k'Ug uO{ cf}iflw pkrf/ vr{ a9\g ;Sg]
x'G5 .
%.k|0ffnLdf Jojwfg (System failure): xf8{j]o/, ;ˆ6j]o/ / g]6js{df ;d:of cfof] eg] ;a} clelnlvt sf/f]af/x? df Jojwfg l;h{gf ub{5 . To:t} System fail ePsf] v08df s]xL jf ;a}
tYofª\sx? u'Dg ;Sb5g\ . The failure of the system (hardware, software and network) will disrupt the operation and may result in the loss of data and
transactions.
sDKo'6/fOh tyf d]g'cn n]vfljlwlar leGgtf
(Difference between Manual and Computerized Accounting)
sDKo'6/fOh tyf d]g'cn n]vfljlwlar leGgtf lgDgfg';f/ 5g\M
d]g'cn n]vfljlw sDKo'6/fOh n]vfljlw
(Manual Accounting) (Computerized Acco(unting)
dflg;n] ;a} sf/f]af/x?sf] clen]vg ub{5g\ . Transactions are sDKo'6/n] dfWodaf6 sf/f]af/x?sf] clen]vg ub{5 . Transactions are recorded using computers.
recorded manually.
.Transactions are stored in volumes of books. ljleGg .Transactions are stored in databases. sf/f]af/x?sf] e08f/0f Data bank df ul/G5
k'l:tsfx?df e08f/0f ug'{kg]{ x'G5 .
Journal, ledger, trial balance and financial Psk6s ef}r/ tof/ ul/;s]kl5 ;ˆ6j]/ dfk{mt axLvftf, ;G'ng k/LIf0f tyf ljQLo ljj/0f tof/ kl/G5. Once journal
statements are prepared manually. axLvftf, ;Gt'ng entries are passed or subsidiary books are entered, data are processed automatically and
k/LIf0f tyf ljlQo ljj/0f dflg;åf/f tof/ kfl/G5 ledger, trial balance and financial statement are prepared automatically.
o;df clwstd ;do nfUb5 . It takes lot of time to record o;df ;dosf] art x'G5 . It saves a lot of time. The only time required is for passing the journals
and prepare reports manually. entries or entering data in subsidiary books.
;~rfng nfut clws x'G5 lsgls ljleGg k'l:tsfdf clen]v /fVg'kg]{ ;~rfng nfut dd{t;Def/ vr{nfO{ 5f]8]/ cToGt Go"g nfUb5 . operating cost is low or minimum.
x'G5 . operating cost is high.

n]vfljlwdf sDKo'6/sf] k|of]u (Applications of Computers in Accounting)

7'nf tyf demf}nf Joj;fosf] n]vf k|0ffNfLnfO{ Jojl:yt ug{ sDKo'6/ k|ljlwsf] pkof]u cToGt h?/L ePsf] 5 . Joj;fodf x'g] Jofkfl/s sf/f]af/x?sf] ljleGg kIfnfO{ n]vfª\sg ug{ lgDgadf]lhd sDKo'6/
k|0ffnLsf] k|of]u 5M
!= Joj;fosf sf/f]af/x?sf] clen]v /fVg (Recording of business transactions): Joj;fodf ePsf k|To]s lbgsf] Jofkfl/s sf/f]af/x? ;f]xL lbg clen]v ug'{kg]{ x'G5 . Hf:t}M vl/b , laj|mL,
;~rfng vr{ tyf cfDbfgLx? OToflb . sDKo'6/ ;ˆ6j]o/sf] dfWodaf6 ;xh ?kdf To:tf] sf/f]af/x?sf] clen]vg ug{ ;lsG5 . Business operations involve different types of
transactions such as purchase, sales, payment, expenses and many more. Traditionally, these business transactions are recorded through manual
accounting in register, books and binders. When the volume of transaction increases, it becomes very difficult and time consuming to maintain the
accounts. The chances of the records being inaccurate and defective will also be high. This problem can be solved by using computers with proper
accounting software.
@. :jrflnt ;a} ljQLo n]vf (Automation of all financial account): s'g} klg Aofkfl/s sf/f]af/sf] sDKo'6/ k|0ffnLdf ef}r/ tof/ u/]kl5 n]vf;DaGwL ;ˆ6j]o/n] cfk}mF axLvftf tof/kf/L
k|ltj]bg lbg] ub{5 . To;sf/0f s'g} klg Jofkfl/s sf/f]af/sf] ef}r/ k|ljli6 u/]kl5 :jrflnt ?kdf To;n] c;/ kfg]{ axLvftfx?df k|efj kfb{5 / k|ltj]bg lbG5 . Computerized accounting
maintains accounting data on a real-time basis through the use of software. Software easily records the business transactions and help to prepare
financial statements automatically.
#= e08f/ clen]vg (Storage accounting): e08f/df ePsf] df}Hbftsf] cj:yfnfO{ t'?Gt hfgsf/L lbg sDKo'6/ n]vfljlwaf6 ;lhnf] x'G5 . Stores accounting is the process of
recording details of stock/inventory movements and balance in value.
$= tnaL clen]vg (Payroll accounting): sd{rf/Lx?nfO{ e'StfgL ug'{kg]{ cfwf/e"t tna, eQf tyf s/s6\6L cflb hfgsf/Lsf] nflu sDKo'6/ n]vfljlw cToGt} pkof]uL x'G5 . Payroll
accounting involves record of employee's salaries, wages, bonuses, net pay, and deductions. Computerized accouinting system helps to prepare
payroll accounting.
%= a}Fs lx;fa ldnfg (Bank reconciliation): sDKo'6/ n]vfljlwn] gub k'l:tsfsf] df}Hbft /sd Joj;foLnfO{ k|bfg ub{{5 . To:t} a}+saf6 k|fKt u/]kl5 lx;faldnfg ug{ ;/n agfpF5 . Bank
reconciliation is a process of matching closing bank balance with the closing cash balance of business. Accounting software reconciles all banking
transactions to check for fraud and to avoid balance sheet errors.
sDKo'6/s[t n]vfljlwsf] k|lj|mof (Process of Computerized Accounting)
n]vf clwn]vgsf] lnlvt (Manual) ljlwh:t} sDKo'6/ k|0ffnLn] klg lgDg k|lj|mofx? cjnDag ub{5 . the computerized accounting system includes the following processes:
 ;"rgfsf] ;|f]tx?sf] cfut ÷clen]v (Input/entering data from information sources)
 ;"rgfsf] k|zf]wg (Information process)
 ;"rgfsf] e08f/0f (Information storage)

!= :f'rgfsf] ;|f]tx?sf] cfut ÷clen]v (Input/ entering data from information sources): sDKo'6/ k|0ffnLsf] n]vfljlwdf vf;u/L ;"rgfsf] ;|f]tsf] ?kdf ljleGg ;|f]tx? 5g\ . h:t}M
k|fylds (Primary) ;|f]t / bf];|f] ;|f]t (Secondary) . k|fylds ;|f]tcGtu{t ljhs (Invoice) ef}r/ kb{5 eg] bf];|f] ;|f]tsf] ?kdf a}+s ljj/0f (Bank statement) kb{5 . To:t} cfGtl/s
(Internal) tyf afx\o (External) ;|f]t . cfGtl/s ;|f]t eGgfn] cfˆg} Joj;foleq ePsf sf/f]af/x? x'g eg] afXo ;|f]t cGtu{t Joj;foeGbf aflx/sf ;ª\u7g (Organization) x? ;Fu}sf]
sf/f]af/x? kb{5g\ . Different sources of information for the computerized accounting can be the primary source like the invoice, secondary source like
the bank statement, internal source like the transaction performed within the organization and the external source like the transaction performed
outside the organization.

5
 @= ;"rgfsf] ?kfGt/0f (Information process): ljQLo sf/f]af/sf tYox?nfO{ ljQLo ljj/0fx? tyf k|ltj]bgx?df ?kfGt/0f u/L To;sf] Jofvof ug]{ k|lj|mofnfO{ g} ?kfGt/0f elgG5 . It is the
process of interpreting, converting, and summarizing financial data to generate financial statements and reports.

#= :f"rgfsf] e08f/0f (Information storage): sDKo'6/ k|0ffnL n]vfljlwdf ;"rgfx?sf] e08f/0f sfuhft,l8lh6n jf Snfp8 (Cloud) :j?kdf e08f/0f ug{ ;lsG5 . n]vfljlwdf sDKo'6/sf]
k|of]ueGbf klxnf ;a} n]vf;Fu ;DalGwt ;"rgfx?nfO{ sfuhdf g} e08f/0f ul/GYof], h:t} uf]]Zj/f ef}r/ tyf axLvftfx? . ha sDKo'6/ k|ljlwsf] ljsf; eof] e08f/0f k|0ffnLdf klg ljsf; eof] /
Floppy disk af6 CD tyf Hard driver / Cloud df e08f/0f xG5 . Hard driver n] sDKo'6/df g} e08f/0f u5{ eg] Cloud n] Internet dfkm{t\ e08f/0f ub{5 / rflxPsf] avt
;lhNf} Kf|of]u ug{ ;lsG5 . Data can be stored by computerized accounting in paper, digital, or cloud formats. Before computers were widely used, financial
data were stored in paper, like the journal and ledger. As technology has evolved, the storage systems also evolved from floppy disks to CDs, hard
drives, and the cloud.
Financial statement laQLo laj/0fM 1 marks
Jofkf/ vftf (Trading Account)
dfn;fdfg vl/b laj|mLaf6 l;h{gf eO{ gfkmf–gf]S;fgsf] l:ylt jf s'n gfkmf tyf s'n 3f6fsf] l:ylt kQf nufpg tof/ kfl/g] vftfnfO{ Jofkf/ vftf elgG5 . The account which is prepared
to find out gross profit or gross loss during accounting period of a company is called trading account.
gfkmf – gf]S;fg vftf (Profit and Loss Account)
Joj;fo ;~rfngaf6 l;h{gf x'g] v'b gfkmf jf gf]S;fgsf] l:ylt kQf nufpg tof/ kfl/g] vftfnfO{ gfkmf gf]S;fg vftf elgG5 . The account which is prepared to find out net
profit or net loss (operating results) of a company is called profit and loss account.
gfkmf–gf]S;fg afF8kmfF8 vftf (Profit and Loss Appropriation Account)
sDkgLn] cfh{g u/]sf] gfkmfnfO{ nfef+z, ljleGg hu]8f sf]ifx? cflbdf ljt/0f u/]sf] l:ylt b]vfpg tof/ kfl/g]] vftfnfO{ g} gfkmf–gf]S;fg afF8kmfF8 vftf elgG5 . The account which shows
the appropriation of net profit for distribution of dividend, transfer to various reserves is called profit and loss appropriation account.
jf;nft (Balance Sheet)
Joj;fosf] :jfldTjdf /x]sf] ;DkQLx?, bfloTjx? / k"FhLsf] hfgsf/L k|bfg ug]{ ljj/0fnfO{ g} jf;nft elgG5 . A statement of assets and liabilities presented as on a given
date usually at the end of accounting period to show the financial position of firm is called balance sheet. It is also known as financial statement
position.
ljlQo ljj/0fx? Financial Statements:
s'g} klg ;+:yfsf] glthf tyf lglZrt ldltdf cfly{s l:yltsf] lrq0f ug]{ n]vfljlw h:t} Jofkf/ vftf, gfkmf gf]S;fg vftf, gfkmf gf] S;fg afF8kmfF8 vftf, tyf jf;nftnfO{ ljlQo ljj/0fx? elGfG5 . The
summary reports of a company's financial transactions in a particular period are called financial statements. Financial statement includes trading
account, Profit and loss account, Profit and loss appropriation account and balance sheet.
Features of financial statements laQLo ljj/0fsf] laz]iftfx?M
i. Expressed in monetary terms df}lb|s d"Nodf AoSt
ii. Historical in nature P]ltxfl;s k|s[lt
iii. Time period ;dofjlw
Objectives of financial statements. laQLo ljj/0fsf] p2]Zox?M
i. To provide information for decision making lg0f{osf] nflu ;"rgf k|bfg ug'{ .
ii. To reflects true and fair view of the organization ;Fu7gsf] ;To tyf lgikIf l:ylt bvfpg' .
Importance of financial statement laQLo ljj/0fsf] dxTjx?M
i. It helps to ascertain the operating result o;n] ;Frnfg glthf kQf nufpg ;xof]u ub{5 .
ii. It helps to management in decision making. o;n] Aoa:yfkg kIfnfO{ lg0f{o lng ;xof]u ub{5 .
Limitation of financial statement laQLo ljj/0fsf] ;Ldfx?M
i) No adjustment of price level d"No :t/sf] ;dfof]hg gx'g' .
ii) Provide quantitative information only kl/df0ffTds ;"rgf dfq k|bfg ug'{ .
cfo ljj/0f Income Statement
s'g} lglZrt ;dojlwsf] cfDbfgL tyf vr{ / gfkmf Pjd\ gf]S;fgsf] l:ylt k|:t't ug{ tof/ kfl/g] ljj/0fnfO{ cfo ljj/0f elgG5 . The accounting report that summarizes the revenues
and the expenses of an accounting period in a company is called income statement or profit and loss statement.
Material and Material control accounting ;fdfu|L / ;fdfu|L lgoGq0f n]vfljlw [2+1=3 marks]
What are materials? ;fdu|L eg]sf] s] x'g <
Materials refers to the physical commodities which are used to make the final product. There are two types of materials. clGtd tof/L a:t' pTkfbg ug{sf]
nflu k|of]u ul/g] sRrf kbfYf{ , lgld{t ;fdu|Lx?, pkof]Uo a:t'x? / ;xfos a:t'x?nfO{{ ;fdu|L elgG5 . ;fdu|Lx? b'O{ k|sf/sf x'G5gM
Direct materials k|ToIf ;fdu|L:
Direct material are the materials having physical existence with the finished product. Direct materials are directly associated with the unit of
finished goods. Paper used in book, woods used in furniture, cotton used in clothing, fruits used in juice etc are the example of direct materials.
clGtd tof/L a:t'sf] ef}lts cl:tTjsf] ?kdf /xg] ;fdu|LnfO{ k|ToIf ;fdu|L elgG5 . k|ToIf ;fdu|Lx? pTkflbt clGtd tof/L a:t'sf] PsfO{;Fu k|ToIf ?kn] ;DalGwt x'G5g\ . lstfadf k|of]u ul/g] sfuh,
kmlg{r/df k|of]u ul/g] sf7, sk8fdf k|of]u ul/g] skf;, h';df k|of]u ul/g] knk'n cflb Kf|ToIf ;fdu|Lsf pbfx/0f x'g .
Indirect materials ck|ToIf ;fdu|L:
The materials which are not used as an input of finished product are called indirect materials. The cost of indirect materials cannot be easily
identified with the finished product. Fuel, lubricating oil, materials used for repair and maintenance work etc are the example of indirect materials.
clGtd tof/L ;fdfgsf] dxTjk"0f{ cª\usf ?kdf g/xg] ;fdu|Lx? ck|ToIf ;fdu|L elgG5 . ck|ToIf ;fdu|Lsf] nfutnfO{ clGtd tof/L a:t'sf] nfutdf ;lhn} klxrfg ug{ ;lsb}g . OGwg, lrKnf] agfpg]
t]n, lsnf , dd{t ;Def/sf] nflu k|of]u ul/g] ;fdu|L cflb ck|ToIf ;fdu|Lsf pbfx/0f x'g .
Write in brief, what you know about material control. ;fdu|L lgoGq0faf/] 5f]6s/Ldf n]Vg'xf];\ .
Material control is the systematic control over purchasing, receiving, storing and consumption of materials in the manufacturing firm.;fdu|L lgoGq0f
eg]sf] pTkfbgd'ns ;+:yfdf ;fdu|Lsf] vl/b, e08f/0f / pkef]usf] k|efjsf/L lgoGq0f xf] .
Write any two objectives of material control. ;fdu|L lgoGq0fsf s'g} b'O{ p2]Zox? n]Vg'xf];\ .
Any three objectives of materials control are given below: ;fdu|L lgoGqosf s'g} b'O{ p2]Zox? tn lbPsf 5g\ .
a. To minimize the handling, storing and usage cost of materials.
;fdfu|L cf];f/k;f/, e08f/0f / pkof]u nfut sd ug'{ .
b. To protect materials against loss by fire, theft and leakage.
cfunfuL , rf]/L jf cGo xflg gf]S;fgLaf6 ;fdfgsf] ;'/Iff ug'{ .
Mention any three essential of material control. ;fdu|L lgoGq0fsf s'g} b'O{ cfjZos zt{x? pNn]v ug'{xf];\ .
Any two essentials of material control are mentioned below:
;fdu|L lgoGq0fsf s'g} b'O{ cfjZos zt{x? tn pNn]v ul/Psf 5gM
a) There should be proper cooperation and coordination among various departments such as purchasing, receiving, inspection and storage.
vl/b ljefu, k|flKt ljefu, lg/LIf0f ljefu / e08f/0f ljefu h:tf ljleGg ljefux? ljr plrt ;xof]u / ;dGjo x'g'kb{5 .
b) There should be proper classification, codification and standardization of all items in store. e08f/0f /x]sf ;Dk"0f{ ;fdu|Lx?sf] plrt juL{s/0f, ;fªs]lts/0f
/ :t/Ls/0f ug'{kb{5 .
Codification of materials ;fdu|L ;fª\s]lts/0fM
6
Codification of materials is understood as the act of giving distinct names and symbols to the different items of materials to facilitate the storage
and issuance of it. ;fdu|Lsf] ;fª\s]lts/0f eGgfn] ;fdu|Lsf] k|s[lt cg';f/ ltgLx?sf] lgsf;L, clen]vg / e08f/0fnfO{ ;lhnf] agfpg] p2]Zon] 5'6\6} gfd / ;ª\s]t lbg] sfo{nfO{ a'emfpF5 .
Classification of materials? ;fdu|L alu{s/0fM
Classification of materials is understood as the act of materials are classified on the basis of their nature and types. It may be classified as
construction materials, spare parts etc. ;fdu|Lx?sf] k|of]u tyf k|s[ltsf] cfwf/df ;fdu|Lx?nfO{ laleGg ;Df'xdf /fVg] sfo{nfO{ ;fdu|Lsf] alu{s/0f elgG5 . h:g} lgdf{0f ;fdu|L, pkef]Uo
;fdfu|L / kf6{k"hf{x? .
Bin card ljgsf8{M
A bin card is a document placed in a rack or cupboard to provide quantitative record of receipts, issues and balances of the materials. It is
maintained by the store keeper. It shows only the quantitative records of materials. ;fdfu|Lsf] k|flKt ,lgsf;L / df}Hbftsf] kl/df0ffTds clen]v /fVgsf] nflu b/fh jf
3/f{df /flvPsf] sfuhftnfO{ ljgsf8{ elgG5 . o;sf] Aoj:yfkg eG8f/]n] ub{5 . o;n] kl/df0ffTds clen]v dfq /fVb5 .
Store ledger e08f/ jf :6f]/ vftfM
The ledger which makes a record of the receipts, issue and the balance, both in quantity and value is called store ledger. It is maintained by cost
accountant and kept in cost department. It shows both quantitative and monetary value of materials K|ffKt ePsf, lgsf;f ePsf / afFsL /x]sf ;fdfu|Lx?sf] kl/df0f,
b/ / hDdf d"Nosf] clen]v /fVg k|of]u ul/g] vftfnfO{ :6f]/ vftf elgG5 . o;sf] Aoj:yfkg nfut n]vfkfnn] ub{5 . o;n] kl/df0f / df}lb]s d'No b'a}sf] clen]v /fVb5 .
Store keeper and duties of a storekeeper. Ef08f/] / e08f/]sf lhDd]jf/Lx?M
Store keeper is a person appointed for taking care of store. He is in-charge of the store and responsible for the control of store. Ef08f/sf] lgoGq0f ug]{
pQ/bfloTj k|fKt ePsf] AolStnfO{ e08f/] elgG5.
The duties of a storekeeper are stated below e08f/]sf lhDd]jf/Lx? tn pNn]v ul/Psf] 5 M
a) Keeping record of materials relating to the receipt and issue of materials.
;fdUf|Lsf] k|flKt / lgsf;Lsf] Jojl:yt clen]v /fVg] .
b) Inspecting the physical quantity of materials and verifying with a bin card.
;fdu|Lsf] ef}lts kl/df0fsf] hfFr ug]{ / ljgsf8{;Fu ?h' ug]{ .
c) Preventing unauthorized persons to the store.
cglws[t AolStnfO{ e08f/ k|j]zdf /f]s nufpg] . _
Centralized and decentralized purchase. s]lGb|s[t / ljs]lGb|s[t vl/bM
Centralized purchase s]lGb|s[t vl/b: It is the system of purchasing materials by a single purchase department which is headed and managed by the
purchase manager. Under this system, the purchase department purchases the required materials for all the departments and branches of the
concern. ;+:yfdf Pp6} s]lGb|o ljefuaf6 dfq ;Dk"0f{ ljefu / zfvfx?nfO{ cfjZos kg]{ ;fdu|Lx? vl/b ug{ ;Sg] k|0ffnLnfO{ jf Aoj:yfnfO{ s]lGb|s[t vl/b elgG5 . o; k|0ffnL cGtu{t ;+:yfsf ;Dk"0f{
ljefu / zfvfx?nfO{ cfjZos kg]{ ;fdu|Lx? vl/b laefun] g} vl/b ug]{ ub{5 .
Advantage (kmfObf):
Utilization of specialized knowledge and skills lalzi6 1fg / ;Lksf] k|of]u .
Uniformity Ps?ktf .
Disadvantage (a]kmfObf):
Chances of misunderstanding. c;embf/Lsf] ;Defjgf .
Increase in transportation cost 9'jfgL vr{df a[l4 .
Decentralized purchase ljs]lGb|s[t vl/bM:
It is the system of purchasing materials by all the departments or branches themselves freely instead by a single department. Under this system,
there is no single purchase manager to purchase the entire materials for all the departments and branches. ;+:yfdf Pp6} ljefuaf6 geO{ ;Dk"0f{ ljefux?n]
cfkm"nfO{ cfjZos kg]{ ;fdu|Lx? :jtGq?kdf cfkm} vl/b ug{ ;Sg] k|0ffnLnfO{ las]lGb|s[t vl/b elgG5 . o; k|0ffnL cGtu{t , ljefu jf zfvfx?nfO{ rflxg] dfn;fdfg vl/b ug{ Pshgf dfq} k|aGws
/xb}g .
Advantage (kmfObf):
This system achieves the advantage of the local purchase. :yflgo :t/df ;a{;'ne tl/sf / pko'St d'Nodf pknAw x'g] ;fdfu|Lx? k|of]u ug]{ cj;/ k|fKt x'G5 .
There is no chance of misunderstanding between the departments and units ;fdfu|L vl/b ;DaGwL laefu jf zfvfx? lar c;embf/L pTkGg x'b}g .
Disadvantage (a]kmfObf):
A firm cannot get discount due to the small quantity of purchase. yf]/} kl/df0fdf ;fdfu|L vl/b ul/g] ePsf]n] Aofkfl/s 5'6 k|fKt x'b}g .
It is not possible to have specialized service in each department. K|fTo]s laefux?df vl/b ;DalGw ;]jf k|bfg ug]{ la1x?sf] Aoj:yf ug{ ;Dej x'b}g .
Store keeping e08f/ clen]vgM
Ef08f/ clen]vg eg]sf] ;fdfu|Lx?sf] vl/b / laqmLnfO{ lgoldt, Aojl:yt / a}1flgs tl/sfn] clen]vg /fVg' xf], h;af6 e08f/df ;fdu|Lsf] clws df}Hbft / Go"g df}Hbft x'g glbO{ nfutdf sld Nofpgdf
d2t ub{5 . Store keeping is a specialized and important function of material control that is specially concerned the physical storage of goods is called
storekeeping.
Types of stores e08f/sf k|sf/x?M
i. Centralized stores s]Gb|Ls[t e08f/
ii. Decentralized stores las]Gb|Ls[t e08f/
iii. Centralized stores with sub-stores ;xfos e08f/;lxtsf] s]Gb|Ls[t e08f/
Centralized stores s]Gb|Ls[t e08f/M
If there is only one store to receive and issue materials to all department of a concern, such store is called centralized stores. olb s'g} ;Fu7gsf ;a}
laefux?nfO{ cfjZos kg]{ ;fdu|Lx?sf] nflu Pp6f dfq e08f/ :yfkgf ul/G5 eg] To;nfO{ s]Gb|Ls[t e08f/ elgG5 .
Advantages kmfObfx?:
a) It helps to gain expertise service in store management. s]Gb|Ls[t e08f/ Aoj:yfaf6 la1x/sf] ;]jf k|fKt ug{ ;lsG5 .
b) This is a better or effective control over store, because all the material are stored centrally. ;a} ;fdu|Lx? Pp6} :yfgdf /flvg] ePsf]n] Kf|efjsf/L ;'kl/a]If0f
af6 ;fdu|Lx?sf] lgoGq0f sfod ug{ ;lsG5 .
Disadvantage a]kmfObfx?:
a) Delay and inconvenience. s]lGb|s[t e08f/ Aoj:yfaf6 l9nfO{ / c;'lawf pTkGg x'G5 .
b) It increases transportation cost. oftfoft nfutdf a[l4 x'G5 .
Decentralized stores las]Gb|Ls[t e08f/
If there is an independent or separate store to receive and issue materials to each department of a concern, such store is called Decentralized stores.
olb s'g} ;Fu7gsf k|To]s laefux?nfO{ cfjZos kg]{ ;fdu|Lx?sf] nflu 5'6\6f 5'6\6} e08f/ jf :fDalGwt laefudf g} e08f/ :yfkgf ul/G5 eg] To;nfO{ las]Gb|Ls[t e08f/ elgG5 .
Advantages kmfObfx?:
a) Internal transportation cost can be saved 9'jfgL vr{ art ug{ ;lsG5 .
b) Loss can be minimized in this system. o; e08f/ Aoj:yfdf ;fdu|L gf]S;fgL hf]lvd Go"g x'G5 .

7
 Disadvantage a]kmfObfx?:
a) More store keeper is needed. Ef08f/sf] /]vb]v ug{ w]/} e08f/]sf] cfjZos kb{5 .
b) More investment is needed w]/} nufgLsf] cfjZostf kb{5 .

Centralized stores with sub-stores ;xfos e08f/;lxtsf] s]Gb|Ls[t e08f/M

In such types of stores, at the beginning, central store purchases huge quantity of materials at a time from suppliers and provides delivery to sub
stores on the basis of their requirement. dfn;fdfg k|fKt x'g] :yfgdf s]GbLs[t e08f/sf] :Yffkgf ul/G5 / Kf|To]s pTkfbg laefu ;Fu Pp6f ;xfos e08f/ :yfkgf ul/Psf] x'G5 eg]
To;nfO{ ;xfos e08f/;lxtsf] s]Gb|Ls[t e08f/ elgG5 .
Advantages kmfObfx?:
a) It facilitated control and supervision. o;n] lgoGq0f / lgl/If0f ;'lawf k|efjsf/L x'g ;xof]u ub{5 .
b) It reduces the transportation cost. 9'afgL vr{df s6f}lt ug{ ;xof]u ub{5 .
Disadvantage a]kmfObfx?:
a) Fixed cost will increase due to extra staffs. Ef08f/sf] Aoj:yfkgsf nflu sDf{rf/L yKg'kg]{ ePsf]n] l:y/ nfut a9\g] x'G5 .
b) Store control becomes difficult and complex. Ef08f/ lgoGq0f hl6n / sl7g x'Gf hfG5 .
Cost accounting (5+1 = 6marks)
Cost accounting (nfut n]vfljlw)
Cost accounting is a technique or process or method or system of recording costs relating to production of goods
and services. In other words, cost accounting is a process of collection, classification, and control over the cost.
Af:t' jf ;]jfx? pTkfbg ubf{ nfUg] nfutx?sf] ;Fsng ug]{, ;DalGwt nfut k'l:tsfdf nfutsf] clen]v /fVg], nfutsf] jlu{s/0f ug]{, nfutsf] laZn]if0f
ug]{, nfut kQf nufpg] / nfut lgoGq0f ug]{ cflb sfo{x?nfO{ nfut n]vfljlw elgG5 .
Nffut n]vfljlwsf p2]Zox? Tfyf sfo{x?M
Nffut n]vfljlwsf p2]Zox? lgDg cg'';f/ 5g\ M
sM a:t' jf ;]jfsf] nfut kQf nufpg' .
vM laqmLod"No lgwf{/0f ug'{ .
uM a:t' jf ;]jfx?sf] nfut laZn]if0f ug{ d2t k'/\ofpg' .
Objectives and function of cost accounting:
Following are the main objective of cost accounting:
a) To provide detailed cost information
b) To help Fixation of selling price
c) To control the cost
d) To help make short term and long term decision.
Importance and advantage of cost accounting:
Following are the main importance and advantage of cost accounting:
a) Cost accounting summarizes cost to fix the price of the product.
b) Cost accounting helps to determine total cost of product.
c) Cost accounting helps to minimize cost.
Nffut n]vfljlwsf] kmfObf tyf dxTjx?M
Nffut n]vfljlwsf kmfObf tyf dxTjx? lgDg cg';f/ 5g\ M
sM o; n]vfljlwn] k|To]s sfo{ jf a:t' jf ;]jfsf] 5'§f5'§} nfut kQf nufpg d2t k'/\ofpF5 .
vM o; n]vfsf] ;xfotfaf6 laqmod"No lgwf{/0f ug{ ;lsG5 .
uM o;n] nfut 36fpg / Iflt Go"lgs/0f ug{ ;xof]u u5{ .
Limitation of cost accounting (nfut n]vfljlwsf ;Ldfx?):
Following are the main Limitation of cost accounting:
a) It is not real science or art.
b) It is prepared on the basis of estimated cost.
c) It does not provide real information for decision making.
nfut n]vfljlwsf ;Ldfx? lgDg lgDg cg';f/ 5g\ M
sM of] jf:tljs la1fg / snf xf]Og .
vM of] n]vfljlw cg'dflgt nfutsf] cfwf/df tof/ kfl/G5 .
uM of] n]vfljlwdf l:y/tf x'b}g, of] ;do / kl/l:ylt cg'';f/ km/s km/s x'G5 .
Financial accounting (ljQLo n]vfljlw):
Financial accounting records the financial transactions of a business organization to determine the profit and loss and financial position under the
review of a past period. cfly{s sf/f]af/x?sf] Aojl:yt / lgoldt tl/sfn] clen]v /fVg] / lalQo k|lta]bgx? Tfof/ kfg]{, laZn]if0f ug]{ / k|of]ustf{x?nfO{ ;"rgf k|afx ug]{ sfo{nfO{ lalQo n]vflalw
elGfG5 .
Objectives of financial accounting:
The Following are the main objectives of financial accounting
a. To record the financial transactions
b. To ascertain the profit or loss
c. To ascertain the financial position of business
d. To determine the tax liability
lalQo n]vfljlwsf p2]Zox?:
laQLo n]vfljlwsf lgDg p2]Zox? 5g\:
a. laQLo sf/f]af/x?sf] clen]v /fVg'
b. gfkmf gf]S;fg kQf nufpg'
c. Aoj;fosf] laQLo l:ylt b]vfpg'
d. s/ bfloTj lgwf{/0f ug'{
Limitation of financial accounting (lalQo n]vfljlwsf ;Ldfx?):
Following are the main Limitation of financial accounting:
a) It does not control over the cost of product.
b) It does not classify the cost.
c) It does not help to determine cost and selling price.

8
 lalQo n]vfljlwsf ;Ldfx?):
lalQo n]vfljlwsf ;Ldfx? lgDg k|sf/sf 5g\ M
sM o; n]vfljlwn] nfut lgoGq0f ug{ ;Sb}g .
vM o; n]vfljlwn] nfut alu{s/0f ub]{g .
uM o; n]vfljlwn] ;lhn} nfut / laqmL d"No kQf nufpg ;Sb}g .

Difference between cost accounting and financial accounting: (nfut n]vfljlw / ljQLo n]vfljlw lardf km/s )
Financial accounting (ljQLo n]vfljlw) Cost accounting(nfut n]vfljlw)
Financial accounting records the financial transactions of a Cost accounting is a technique or process or method or
business organization to determine the profit and loss and system of recording costs relating to production of goods and
financial position under the review of a past period. services. In other words, cost accounting is a process of
cfly{s sf/f]af/x?sf] Aojl:yt / lgoldt tl/sfn] clen]v /fVg] / lalQo k|lta]bgx? Tfof/ collection, classification, and control over the cost.
kfg]{, laZn]if0f ug]{ / k|of]ustf{x?nfO{ ;"rgf k|afx ug]{ sfo{nfO{ lalQo n]vflalw elGfG5 . Af:t' jf ;]jfx? pTkfbg ubf{ nfUg] nfutx?sf] ;Fsng ug]{, ;DalGwt nfut
k'l:tsfdf nfutsf] clen]v /fVg], nfutsf] jlu{s/0f ug]{, nfutsf] laZn]if0f ug]{,
nfut kQf nufpg] / nfut lgoGq0f ug]{ cflb sfo{x?nfO{ nfut n]vfljlw elgG5 .
It is used by both internal and external parties. It is used by internal parties only
o;sf] k|of]u cflGtl/s / afÅo b'a} kIfn] ub{5g . o;sf] k|of]u cflGtl/s kIfn] dfq ub{5g .

It records only past transactions. It records both past and future transactions. o;n] laut / eljZosf
o;n] lautsf cfly{s sf/f]jf/x?sf] dfq clen]v /fVb5 . nflu sfo{of]hgfx? Afgfpg] ;DalGw clen]v /flvG5 . .

Method of costing (1 marks) nfut lgwf{/0fsf lalwx?M

a) Job order costing sfo{ cfb]z n]vfljlw
b) Contract costing 7]Ssf nfut ljlw
c) Batch costing ;d'x nfut lalw
d) Output or unit or single costing pTkfbg jf PsfO jf Psn nfut lalw
e) Operating or service costing ;Frnfg jf ;]jf nfut lalw
f) Process costing k|s[of nfut ljlw
g) Multiple costing ax' nfut ljlw
Method of costing (1 marks) nfut lgwf{/0fsf lalwx?M
1. Process costing k|s[of nfut ljlwM
The method of costing which is used to ascertain the cost of each process or stage of producing output is called process costing.
sRrf kbfy{af6 tof/L a:t' pTkfbg ug]{ qmddf Pp6f r/0f af6 csf]{ r/0f x'b} cGTodf tof/L a:t' pTkfbg ul/G5 . o;/L a:t'x? laleGg r/0fdf pTkfbg ubf{ nfu]sf] nfut kQf
nufpg k|of]u ul/g] lalwnfO{ k|s[of nfut lalw elgG5 .
2. Contract costing 7]Ssf nfut ljlwM
The costing method which is applied by the house builders or contractee and contractor is called contract costing. of] lgdf{0f sfo{ ;FUf ;DalGwt
x'G5 . ;DkGg ul/g] 7]Ssfsf] nfut tyf gfkmf kQf nufpg k|of]u ul/g] ljlwnfO{ 7]Ssf nfutljlw elgG5 .
3. Operating or service costing ;Frnfg jf ;]jf nfut lalwM
The costing method which is used for ascertaining the costs of service rendered by service oriented industries such as Transport
Company, Cinema hall, hotels, hospital and so on is called service costing. a:t' pTkfbg gu/L laleGg k|sf/sf ;]jfx? K|fbfg ubf{ nfu]sf] nfut kQf nufpg
k|of]u ul/g] ljlwnfO{ ;]jf nfut ljlw elgG5 .
4. Output or unit or single costing pTkfbg jf PsfO jf Psn nfut lalwM
The method which is applied to ascertain the cost of each unit of output is called output or unit or single costing. Pp6} u'0f, cfsf/ / :j?k
ePsf Ps jf Ps eGbf al9 a:t'x? pTkfbg ubf{ a:t'x?sf] pTkfbg nfut kQf nufpg k|of]u ul/g] ljlwnfO{ Psn nfut ljlw elgG5 .
5. Job order costing sfo{ cfb]z n]vfljlwM
The costing method which calculates and controls the cost for each job order from customer separately is called job order costing. s'g}
lalzi6 sfo{ ;Dkfbg ubf{ nfUg] nfut kQf nufpg] ljlwnfO{ sfo{ cfb]z nfut ljlw elgG5 .
6. Batch costing ;d'x nfut lalwM
It is a part of job costing and is applied to ascertain the cost of production in industries where production is carried on in batches.
Uf|fxssf] dfu cfb]zsf] nflu geO{ elaZodf lalqm ug]{ p2]Zon] e08f/ ug{sf nflu pTkfbg ul/g] dfn;fdfgx?sf] nfut kQf nufpg k|of]u ul/g] ljlwnfO{ ;d'x nfut ljlw elgG5 .
7. Multiple costing ax' nfut ljlwM
Multiple costing or composite costing is applied to ascertain the cost of complex products manufactured by manufacturing concerns
where no single method of costing is applicable. Pp6} a:t'sf] nfut lgwf{/0f ug{sf] nflu Ps eGbf al9 nfut ljlwx? K|fof]u ul/G5 eg] To;nfO{ ax' nfut ljlw
elgG5 .
Cost classification:
1. What do you mean by cost? Write in short about direct cost.
nfut eGgfn] s] a'em\g'x'G5 < Kf|ToIf nfutaf/] 5f]6s/Ldf n]Vgxf]; .
Cost is defined as an amount of money spent for obtaining any goods or service. For the purpose of manufacturing concern, cost is the expenditure
incurred in the manufacture of a particular product or service. It denotes to the monetary resources paid for converting raw materials into finished
product. nfut eg]sf]] s'g} j:t' tyf ;]jf k|fKt ug{sf] nflu ltl/Psf] df}lb|s /sd xf] . pTkfbg d'ns :f+:yfsf] k|of]hgsf] nflu nfut eg]sf] a:t' jf ;]jf pTkfbgdf a]xf]l/Psf] vr{ xf] . o;n] sRrf
kbfy{nfO{ clGtd tof/L j:t'df kl/0ft ug{sf] nflu e'StfgL ul/Psf] df}lb|s ;fwgnfO{ hgfpF5 . Direct cost: The cost of material, labor and other expenses which can be easily
identified with a unit of product is known as direct cost. The cost of raw materials, productive wage and carriage of materials paid are the examples
of direct cost.
Kf|ToIf nfutM k|To]s PsfO{ j:t', k|lj|mof / ultljlw ;lhn} klxrfg ug{ ;lsg] ;fdu|L, >d / cGo vr{x?sf] nfutnfO{ k| To]If nfut elgG5 . sRrf ;fdu|L, pTkfbg Hofnf tyf ;fdu|L vl/bdf nfu]sf]
9'jfgL eg]sf] k|To]If nfutsf pbfx/0f x'g\ .

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 2. Differential between direct cost and indirect cost.
k|ToIf nfut / ck|ToIf nfut lar leGgtf b]vfpg'xf]; .
Following are the differences between direct cost and indirect cost:
Direct cost Indirect cost
1. It is the sum total of direct material, direct labour and 2. It is the sum total of indirect material, indirect labor
other direct expenses. of] k|ToIf ;fdu|L , k|ToIf >d / cGo k|ToIf and other indirect cost. of] ck|ToIf ;fdu|L, ck|ToIf >d / cGo
vr{x?sf] s'n of]u xf] . ck|ToIf vr{x?sf] s'n of]u xf] .
2. The total of direct cost is called prime cost. k|ToIf nfutsf] 3. The total of indirect cost is called overhead. ck|ToIf nfutsf]
s'n of]unfO{ d'Vo nfut elgG5 . s'n of]unfO{ pkl/Joo elgG5 .

3. Classify cost according to element.

tTjsf] cfwf/df nfutsf] juL{s/0f ug'{xf];\ .
Cost can be classified into three types according to element. They are materials cost, labour cost and overhead cost. These costs are briefly explained
below: TfTjsf] cfwf/df nfutnfO{ ltg k|sf/df juL{s/0f ug{ ;lsG5 . ltgLx? ;fdu|L nfut , >d nfut / cGo vr{x? h;nfO{ 5f]6s/Ldf tn j0f{g ul/Psf] 5 M
Material cost ;fdu|L nfutM: Material cost represents the total cost of basic raw materials, components, consumable stores and packing materials. It
may be direct material cost and indirect cost.;fdu|L nfut cGtu{t cfwf/e"t sRrf ;fdu|L, kf6{{k'hf{ , pkef]Uo ;fdu|L / Koflsª\usf ;fdu|Lx? kb{5g\ . ;fdu|L nfut klg k|ToIf ;fdUf|L
nfut / ck|ToIf ;fdu|L nfut u/L b'O{ Kf|sf/sf] x'G5 .
Labor cost >d nfutM: Labor cost represents the total of wages paid to the employees engaged in the manufacture of goods or services. >d nfut eGgfn]
j:t' tyf ;]jfsf] pTkfbgdf ;+FNfUg sfdbf/x?nfO{ Hofnfsf] ?kdf e'StfgL ul/Psf] s'n /sdnfO{ a'lemG5.
Other expenses cGo vr{: The costs incurred for other than material and labor are called overhead costs. In other expenses are also of two types i.e
direct expense and indirect expenses. ;fdu|L / >db]lv afx]ssf cGo zLif{sx?df ul/Psf] e'StfgL /sdnfO{ cGo vr{ elgG5 .
4. Write about the costs which belong to functional classification of cost.
sfo{sf] cfwf/df juL{s/0f ul/g] nfutsf] af/]df n]Vg'xf]; \ .
On the basis of function, cost can be classified into following heads sfo{sf] cfwf/df nfutnfO{ lgDgfg';f/ juL{s/0f ug{ ;lsG5 .
a. Manufacturing cost pTkfbg nfutM: Manufacturing cost is the sum total of indirect material, indirect labor and indirect expenses which are
incurred for conversion of raw materials into finished goods. pTkfbg nfut ck|ToIf ;fdu|L, ck|ToIf >d / cGo ck|ToIf vr{x?sf] s'n of]u xf] h'g sRrf ;fdu|L nfO{
clGtd tof/L j:t'df kl/0ft ubf{ a]xf]l/G5 .
b. Administrative cost: Administrative cost is the sum total of office and administrative activities of a firm. k|zf;lgs nfutM Kf|zf;lgs nfut ;+:yfsf]
sfof{no tyf k|zf;lgs ultljlwx?df a]xf]l/Psf] nfut xf] .
c. Selling and distribution cost: The cost which is incurred for selling and distribution of finished goods are called selling and distribution cost
ljj|mL ljt/0f nfutM clGtd tof/L a:t'sf] ljj|mL ljt/0fdf a]xf]g'{kg]{ nfutnfO{ ljj|mL ljt/0f nfut elgG5 .
5. Write about the controllable and uncontrollable costs with appropriate examples.
pko'St pbfx/0f;lxt lgoGq0fof]Uo nfut / lgoGq0f cof]Uo nfut af/] n]Vg'xf]];\ .
Controllable cost lgoGq0f of]Uo nfutM: The cost which is influenced by the action or decision of a particular manager or management is called
controllable cost. s'g} Joj:yfks jf Joj:yfkgsf] sfo{ jf lg0f{oaf6 k|efljt x'g] nfutnfO{ lgoGq0f of]Uo nfut elgG5 .
Uncontrollable cost lgoGq0f cof]Uo nfutM: The cost which is not influenced by the action or decision of a particular manager or management is called
uncontrollable cost. s'g} Joj:yfks jf Joj:yfkgsf] sfo{ jf lgoGq0faf6 k|efljt gx'g] nfutnfO{ lgoGq0f cof]Uo nfut elgG5 .
6. Write the meaning of fixed and variable cost with examples.
l:y/ / kl/jt{gzLn nfut lar leGgtf 5'6\ofpg'xf]; .
Fixed cost l:y/ nfutM: Fixed cost is a type of cost that does not change with volume of output. It remains constant to the relevant range of activity.
Few examples of fixed cost are depreciation, rent and salaries. pTkfbgsg] dfqfdf 36a9 eP cg';f/ kl/jt{g gx'g] jf gt 36\g] gt a9\g] nfutnfO{ l:y/ nfut elgG5 .
Variable cost kl/jt{gzLn nfutM: The cost which changes proportionately with volume of output or service is called variable cost. It increases or
decreases in total amount as per the increase or decrease in the volume of output. The examples of variable cost are direct material, direct labor
and other direct expenses. pTkfbgsg] dfqfdf 36a9 eP cg';f/ kl/jt{g x'g] nfutnfO{ kl/jt{gzLn nfut elgG5 . kl/jt{gzLn nfutsf pbfx/0fx?df k|ToIf ;fdu|L, k| ToIf >d / cGo k|ToIf
vr{x? kb{5g\ .
7. Define semi-variable cost.
cw{ kl/jt{gzLn nfutsf] kl/efiff lbg'xf];\ .
Semi-variable cost: These costs represent both some part of variable costs and some part of fixed costs. Such costs are fixed only upto certain level
of output and will be changed after the certain level of output. These costs are also called mixed cost. Telephone charges, water and electricity
charges, etc are the examples of semi-variable cost. Pp6f lglZrt pTkfbgsf] dfqf;Dd l:y/ /xg] / ;f] eGbf dfly ;dfg'kflts tj/n] kl/jt{g x'g] nfutnfO{ cw{ kl/jt{gzLn nfut
elgG5 . o:tf] nfutnfO{ ldl>t nfut klg elgG5 . 6]lnkmf]g dx;'n, kfgL tyf ljh'nL dx;'n cflb cw{kl/jt{gzLn nfutsf pbfx/0f x'g .

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