Non intergrated System of Accounting


Situation
Financial records
Non-integrated record
Integrated records
                                                      1. Raw material
1)       Purchase of raw material by cash or on credit including expenses for purchase.
Purchase A/C Dr.      
        To cash/creditors A/C
    
                                           
Raw material control a/c Dr.
        To general ledger adj. a/c
Raw material  Control a/c
         To cash/ creditors a/c
2)       Purchas of raw material directly issued to production without routine through stores a/c
purchase a/c  Dr.
        To cash/creditors a/c
WIP control A/c
      To general ledger adj. a/c
WIP control a/c
       To cash/creditors a/c
3)       Issue of raw material to production
No entry
 WIP control a/c
       To raw material control/c
WIP control a/c
       To raw material control a/c
4)       Return of raw material to suppliers and venders
Creditors a/c Dr.
        To purchase a/c
General ledger adjust.a/c
       To raw material control a/c
     
Creditors a/c Dr.
       To raw material control a/c
5)       Return of raw material from production
No entry       
Raw material control a/c
       To WIP control a/c
Raw material control a/c
          To WIP control a/c
6)       Issue of raw material for maintenance
Repair & maintenance Exp.a/c
         To purchase a/c
Factory O/H control a/c
       To raw material control a/c
Factory O/H control a/c
         To raw material control a/c
7)       Abnormal loss
1.       For abnormal loss


2.       For insurance

Abnormal loss a/c
       To trading a/c

Cash/claim R/C A/C
P &L A/C
        To abnormal loss a/c

Abnormal loss a/c
        To raw material control a/c

Costing P&L a/c
        To abnormal loss a/c

Abnormal loss a/c
        To raw material control a/c

Cash/claim R/C a/c
Coating P&L a/c
          To abnormal loss a/c
                                              2. Labour cost (wages)
1)       Payment of wages
Wages a/c Dr.
     To cash bank a/c
Wage control a/c Dr.
       To General ledger adj. a/c
wage control a/c Dr.
         to bank/cash a/c
2)       Analysis of wages into direct/indirect and abnormal
No entry
WIP progress a/c(Direct Wage)
Factory O/H a/c(Indirect Wage)
Abnormal loss(Over Time)
         Wage Control a/c
WIP progress a/c(Direct Wage)
Factory O/H a/c(Indirect Wage)
Abnormal loss(Over Time)
         Wage Control a/c
                                     3. Overheads & absorption
1)       Incurrence of O/H or indirect Expenses
Variance Exp. a/c Dr.
       To cash/bank a/c
Factory O/H control a/c Dr.
Adm. O/H Control a/c Dr.
Selling O/H Control a/c Dr.
       To general ledger adj. a/c
Factory O/H control a/c Dr.
Adm. O/H Control a/c Dr.
Selling O/H Control a/c Dr.
       To general ledger adj. a/c
2)       Depreciation on Fixed Assets
Depreciation a/c Dr.
         To fixed Assets a/c
Factory O/H control a/c Dr.
Adm. O/H Control a/c Dr.
Selling O/H Control a/c Dr.
       To general ledger adj. a/c
Factory O/H control a/c Dr.
Adm. O/H Control a/c Dr.
Selling O/H Control a/c Dr.
         To fixed Assets a/c
3)       Absorption of factory O/H
No entry
WIP Control a/c Dr.
        To factory O/H Control a/c
WIP Control a/c Dr.
        To factory O/H Control a/c
4)       Normal underabsorption of factory O/H
No entry
COGS Control a/c Dr.
FG Control a/c Dr.
WIP Control a/c Dr.
         To factory O/H Ctrl a/c
COGS Control a/c Dr.
FG Control a/c Dr.
WIP Control a/c Dr.
         To factory O/H Ctrl a/c
5)       Abnormal underabsorption of factory O/H
No entry
Costing P&L A/C DR.
      TO Factory O/H Control a/c
P&L A/C Dr.
         To factory O/H Control
6)       Over absorption of factory OH(if written off to P&L)
No entry
Factory O/H Control a/c Dr.
       To costing P&L
Factory O/H Control a/c
        To P&L A/C
7)       Recording goods produced(at factory cost)
No entry
Finished goods control a/c Dr.
        To WIP control a/c
Finished goods control a/c
         To WIP control a/c
8)       Absorption of administrative O/H
No entry
Finished goods control a/c Dr.
       To AOH A/C
Finished goods control a/c
        To AOH A/C
9)       Under absorption of AOH (under absorption of AOH can be written off to costing P&L Accounts, as an alternative accounting treatment)
No Entry
COGS(for sale qtty) Dr.
 Finished goods ctrl(for FG qtty)
          To factory O/H
COGS(for sale qtty) Dr.
 Finished goods ctrl(for FG qtty)
          To factory O/H
10)   Recording Cost of goods sold(at total cost of production)
No entry
Cost of sales a/c Dr.
        To finished goods ctrl a/c
Cost of sales a/c Dr.
        To finished goods ctrl a/c
11)   Absorption of selling O/H
No entry
Cost of sales a/c Dr.
         To SOH a/c
Cost of sales a/c Dr.
         To SOH a/c
12)   Under absorption of  SOH
No entry
Costing P&L a/c Dr.
         To SOH control a/c
Costing P&L a/c Dr.
         To SOH control a/c
4)  Sales and profit
1)       Sales realisation
Cash and sundry debtors a/c Dr.
        To sales a/c
General ledger adj a/c Dr.
         To sales a/c
Cash and sundry debtors a/c Dr.
        To sales a/c
2)       Transfer of cost of sales to profit and loss account
Sales Dr.
Other income  Dr.
     To P&L a/c
Sales a/c Dr.
     To cost of sales
P&L a/c Dr.
    TO Cost of sales a/c
    To other expenses  a/c
3)       Transfer of sales profit and loss account
Sales a/c Dr.
Other income a/c
      To P&L a/c
Sales a/c Dr.
    To costing P&L a/c
Sales a/c Dr.
other income a/c Dr.
     to P&L a/c
4)       Profit for the period
P&L a/c  Dr.
     To capital a/c
Costing P&L a/c Dr.
     To general ledger a/c
P&L a/c Dr.
    To capital a/c
5)  Capital Work In Progress

1) Work in Progress:- Materials Issued
Capital WIP Dr.
         To cash/ purchase
For purchase:
Raw materials.Control Dr.
        To Gen. ledg. Adj.
For issue:
Capital WIP Dr.
        To Raw material control
For purchse :
Raw material control Dr.
        To cash/ S. creditors
For issue:
Capital WIP Dr.
       To Raw material control

2) completion of capital Asset
Fixed asset Dr.
       To capital WIP
General ledger Adj. Dr.
        To capital WIP
Fixed asset Dr.
       To capital WIP



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