Chapter Three Flashcards
Business wants revenue and costs incurred to be charged to the correct responsibility center, how does this happen
The revenue or expenditure must be coded to show what type it is and which responsibility center it is to be charged to
A coding list for account should be designed so that’s it…
Possible to collect and produce information for both management and accounting purposes
What does a coding list for accounts avoid ?
The need to enter the same information on the computer twice
Benefits of coding
Record and retrieve info quickly and easily
Be automatically accurate and have built in checking facilities
Be caaapbel of sorting info in different ways and printing off detailed reports required
Cons of coding
Potential to enter data wrong
Some costs relate to more than one cost center (eg an electric bill)
