Introduction to Reconciliation of Cost and Financial Accounts
In financial accounting, a bank reconciliation statement is ready to reconcile among the bank balance as depicted through the pass- book and cash- book of a business organization. This statement is ready while there is a variation among the balances as depicted through both these books. On similar principle, a reconciliation statement is ready in cost accounts for reconciling the profits depicted through the cost accounts and financial accounts. In fact this is needed while the profits depicted by both the methods different. Profit depicted through the cost accounts and financial accounts different while accounts are kept on non-integrated system that means that cost accounts and financial accounts are ready separately and separately of each other.
In such a case, profit disclosed through one accounting system will different from the profit depicted through the other and requirement for reconciliation will arise.
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