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Integral Non Integral Accounts

This document discusses integral and non-integral accounting systems. A non-integral system uses separate accounts to record financial and cost transactions with control accounts, ledgers for costs, stores, work-in-progress and finished goods. A control account tracks each category. An integrated system records financial and cost accounts together in the same books.

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sonimuskan2022
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7 views

Integral Non Integral Accounts

This document discusses integral and non-integral accounting systems. A non-integral system uses separate accounts to record financial and cost transactions with control accounts, ledgers for costs, stores, work-in-progress and finished goods. A control account tracks each category. An integrated system records financial and cost accounts together in the same books.

Uploaded by

sonimuskan2022
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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INTEGRAL AND NON INTEGRAL

SYSTEMS
Systems of Cost Accounting
 Integral or Integrated accounting system:
Financial & cost accounts are merged & single set of
books are maintained

Non-integral or Non integrated


(independent) accounting system: two
separate sets of accounts are maintained
Non-integrated Accounting System
It is an accounting system where separate
account books are maintained to record
financial and cost transactions with the help of
ledgers and cost control accounts.
Non- integrated accounts
• Types of accounts maintained in cost accounts
NON-EPRSONAL A/C

PERSONAL A/Cs (not


IMPERSONAL A/Cs
maintained)

REAL A/Cs
( only accounts NOMINAL A/CS
relating to ( both costs &
stocks, WIP, & revenue are
FG are recorded)
maintained
Ledgers under non-integrated system
 Cost ledger;

 Stores Ledger;

 WIP ledger;

 Finished Goods Ledger


Control accounts
 Stores ledger control account.
 Work-in-progress ledger control account.
 Finished good ledger control account.
 General ledger control account.
 Wages control account.
 Factory overhead control account.
 Administrative overhead control account.
 Selling and distribution overhead control account.
 Cost of sales account.
 Overhead adjustment account.
 Costing profit and loss account.
Characteristics of the non-integrated
accounting system
 Separate account books are maintained to record financial
and cost transactions.
 Financial and cost accountant both are responsible to
record transactions in the book separately.
 The double entry system is adapted for recording the
transactions in both accounts books. Personal and real
accounts are not opened in cost account books.
 General and cost ledger adjustment account is opened in
cost books to complete the double entry system.
 Reconciliation statement is prepared to reconcile profits as
revealed by cost account books and financial account books
Integrated accounting system
Integrated accounting system is a method of
accounting in which financial and cost
accounts are recorded in the same books
based on the double entry system.
Main advantages of the integrated
accounting system

 Simple & economical;

 No need for reconciliation;

 Centralization of accounting work;

 Better coordination;

 Provides prompt cost information;

 Suitable for computerized accounting;


Limitations of the integrated accounting
system
• The accounting system is sophisticated and
requires efficient and trained staff.
• Not suitable if cost and financial data are
required to be separately presented.
• This accounting system is complicated and
costly.

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