Cost ing Cycle 3j6o5w
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Cost Concepts
Cost Cycle
Cost ing Cycle When Single General Ledger Journal Entries
When Separate General Ledger and Factory Ledger are Maintain Head Office Books Factory Office Books No.1 ACQUISIUION AND USE OF MARERIALS
Purchase of material from supplier (Direct or indirect material) Material control Factory ledger Materials control Voucher payable Vouchers payable General ledger Return to materials to suppliers Vouchers payable Vouchers payable Material control Factory ledger
General ledger Material control
Use of materials in production/material requisitioned/material issued from store Work in process control Marketing overhead control Work in process control Factory overhead control Factory ledger Factory overhead control Marketing overhead control General ledger Material control Material control Return of unused materials from factory Materials control Work in process control No entry Factory overhead control
Materials control Work in process control Factory overhead control
When material is purchased from supplier and immediately sent to production for use Work in process Factory ledger Work in process Factory overhead control Voucher payable Factory overhead control Voucher payable General ledger When there is normal loss of material/shortage of material Factory overhead control Material control No Entry
Composed by: Baber Mehmood
Factory overhead control Material control
Cost Concepts
Cost Cycle No.2 USE OF LABOUR
Recording gross payroll, deductions and net pay Payroll Payroll Income tax withheld Income tax withheld Provident fund payable Provident fund payable Any other deduction Any other deduction Accrued payroll Accrued payroll
No Entry
Preparing payroll voucher and payment Accrued payroll Accrued payroll Vouchers payable Vouchers payable
No entry
Payment of voucher Vouchers payable Cash
No entry
Distribution of payroll Work in process control Factory overhead control Selling overhead control n. overhead control Payroll control
Vouchers payable Cash Factory ledger Marketing overhead control n. Overhead control Payroll control
Work in process control Factory overhead control General ledger
Recording employer’s liability for contribution Factory overhead control Selling overhead control n. Overhead control Provident fund payable Social security payable
Factory ledger Marketing overhead control n. Overhead control Provident fund payable Social security payable
Factory overhead control General ledger
No.3 INSURANCE AND CHARGE OF FACTORY OVERHEAD Recording actual factory overhead Factory overhead actual Factory overhead actual Utilities payable Utilities payable Prepaid insurance Prepaid insurance Allowance for dep. Allowance for dep. OR OR Voucher payable Voucher payable Charged of FOH applied to production Work in process Factory overhead applied
Composed by: Baber Mehmood
No entry
Factory overhead control General ledger
Work in process FOH applied
Cost Concepts
Cost Cycle
Close FOH applied to FOH control A/c FOH applied FOH control
No entry
To record FOH Under-applied Cost of goods sold Under applied FOH
General ledger Under applied FOH
OR WIP-Material WIP-Labour WIP-FOH Finished goods Cost of goods sold Under applied FOH
FOH applied FOH control
Cost of goods sold Factory ledger
To close under applied FOH to FOH control a/c Under applied FOH No entry FOH control
OR WIP-Material WIP-Labour WIP-FOH Finished goods General ledger Under applied FOH
Under applied FOH FOH control
No.4 TRANSFER OF COST TO FINISHED GOODS When one WIP a/c is issued Finished goods control Work in process
No entry
When three WIP a/c are used Finished goods control WIP-Material WIP-Labour WIP-FOH
Finished goods control Work in process
No entry
No. 5 SALE OF FINISHED GOODS To record cost of goods sold Cost of goods sold control Finished goods control
Cost of goods sold control Factory ledger
General ledger Finished goods control
To Record Return of Goods at Cost Finished goods control Cost of goods sold control
Factory ledger Cost of goods sold control
Composed by: Baber Mehmood
Finished goods control General ledger
Cost Concepts
Cost Cycle
To Record Sale Price Cash receivable Sale control
Cash receivable Sale control
To Record Sale Return Sale return s receivable
Sale return s receivable
Composed by: Baber Mehmood
No entry
No entry
Cost Cycle
Cost ing Cycle When Single General Ledger Journal Entries
When Separate General Ledger and Factory Ledger are Maintain Head Office Books Factory Office Books No.1 ACQUISIUION AND USE OF MARERIALS
Purchase of material from supplier (Direct or indirect material) Material control Factory ledger Materials control Voucher payable Vouchers payable General ledger Return to materials to suppliers Vouchers payable Vouchers payable Material control Factory ledger
General ledger Material control
Use of materials in production/material requisitioned/material issued from store Work in process control Marketing overhead control Work in process control Factory overhead control Factory ledger Factory overhead control Marketing overhead control General ledger Material control Material control Return of unused materials from factory Materials control Work in process control No entry Factory overhead control
Materials control Work in process control Factory overhead control
When material is purchased from supplier and immediately sent to production for use Work in process Factory ledger Work in process Factory overhead control Voucher payable Factory overhead control Voucher payable General ledger When there is normal loss of material/shortage of material Factory overhead control Material control No Entry
Composed by: Baber Mehmood
Factory overhead control Material control
Cost Concepts
Cost Cycle No.2 USE OF LABOUR
Recording gross payroll, deductions and net pay Payroll Payroll Income tax withheld Income tax withheld Provident fund payable Provident fund payable Any other deduction Any other deduction Accrued payroll Accrued payroll
No Entry
Preparing payroll voucher and payment Accrued payroll Accrued payroll Vouchers payable Vouchers payable
No entry
Payment of voucher Vouchers payable Cash
No entry
Distribution of payroll Work in process control Factory overhead control Selling overhead control n. overhead control Payroll control
Vouchers payable Cash Factory ledger Marketing overhead control n. Overhead control Payroll control
Work in process control Factory overhead control General ledger
Recording employer’s liability for contribution Factory overhead control Selling overhead control n. Overhead control Provident fund payable Social security payable
Factory ledger Marketing overhead control n. Overhead control Provident fund payable Social security payable
Factory overhead control General ledger
No.3 INSURANCE AND CHARGE OF FACTORY OVERHEAD Recording actual factory overhead Factory overhead actual Factory overhead actual Utilities payable Utilities payable Prepaid insurance Prepaid insurance Allowance for dep. Allowance for dep. OR OR Voucher payable Voucher payable Charged of FOH applied to production Work in process Factory overhead applied
Composed by: Baber Mehmood
No entry
Factory overhead control General ledger
Work in process FOH applied
Cost Concepts
Cost Cycle
Close FOH applied to FOH control A/c FOH applied FOH control
No entry
To record FOH Under-applied Cost of goods sold Under applied FOH
General ledger Under applied FOH
OR WIP-Material WIP-Labour WIP-FOH Finished goods Cost of goods sold Under applied FOH
FOH applied FOH control
Cost of goods sold Factory ledger
To close under applied FOH to FOH control a/c Under applied FOH No entry FOH control
OR WIP-Material WIP-Labour WIP-FOH Finished goods General ledger Under applied FOH
Under applied FOH FOH control
No.4 TRANSFER OF COST TO FINISHED GOODS When one WIP a/c is issued Finished goods control Work in process
No entry
When three WIP a/c are used Finished goods control WIP-Material WIP-Labour WIP-FOH
Finished goods control Work in process
No entry
No. 5 SALE OF FINISHED GOODS To record cost of goods sold Cost of goods sold control Finished goods control
Cost of goods sold control Factory ledger
General ledger Finished goods control
To Record Return of Goods at Cost Finished goods control Cost of goods sold control
Factory ledger Cost of goods sold control
Composed by: Baber Mehmood
Finished goods control General ledger
Cost Concepts
Cost Cycle
To Record Sale Price Cash receivable Sale control
Cash receivable Sale control
To Record Sale Return Sale return s receivable
Sale return s receivable
Composed by: Baber Mehmood
No entry
No entry
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