Integrated Accounting Flashcards
What is the focus of integrated cost accounting?
Accounting entries and source documents for job costing system
Integrated cost accounting emphasizes the importance of accurate recording and management of costs associated with specific jobs.
What are the three types of stock accounts?
- Inventory
- Work in progress
- Finished goods
These types represent the stages of production and the related costs incurred.
What is the purpose of a Goods Received Note?
To confirm the receipt of goods into inventory
It serves as evidence for the business regarding items received from suppliers.
Fill in the blank: The _______ is used to document the request for materials from inventory.
Stores Requisition Note
This document is essential in tracking inventory usage and ensuring that the correct materials are taken from stock.
What are the advantages of an integrated accounting system?
- Easier to maintain
- Less potential for error
- No reconciliation required
- Easier for auditor to understand
Integrated systems streamline processes by consolidating cost and financial accounting into a single system.
What are the disadvantages of an integrated accounting system?
- One set of accounts meets two different needs
- Compliance with IAS 2 for inventory valuation
The dual purpose of the accounts can complicate reporting and compliance.
What is the difference between integrated and interlocking accounting systems?
Integrated systems use one set of accounts for both costing and financial purposes, while interlocking systems maintain separate accounts for each purpose
This fundamental difference affects how transactions are recorded and reported.
What is FIFO in the context of inventory accounting?
First In, First Out
FIFO is a method used to manage inventory costs and ensure that the oldest stock is sold first.
What is the role of accounting for labour costs in job costing?
To accurately allocate labour expenses to specific jobs
This ensures that the total cost of each job reflects all relevant expenditures.
What does the term ‘manufacturing overheads’ refer to?
Indirect costs associated with manufacturing that cannot be directly traced to a specific job
This includes costs such as utilities, depreciation, and indirect materials.
True or False: Integrated accounting systems require reconciliation of cost and financial ledgers.
False
Integrated systems eliminate the need for reconciliation since they operate with a single ledger.
What is the significance of double-entry bookkeeping in accounting?
It ensures that every transaction affects at least two accounts, maintaining balance in the accounting equation
This system is fundamental for accurate financial reporting.
What does the term ‘Job completion’ refer to in job costing?
The process of finalizing all costs and revenues associated with a specific job
This marks the end of the job costing cycle and prepares the job for financial reporting.
What types of costs are included in non-manufacturing overheads?
Costs not directly tied to production, such as administrative and selling expenses
These costs are essential for overall business operations but do not contribute to product manufacturing.
