Integrated and Interlocking Accounts
All efficiently managed organisations need to keep some form of financial accounting system. For some organisations, such as limited companies, there are strict legal requirements that must be adhered to, but even very small businesses need to keep some form of financial records for taxation purposes. In addition to financial accounts, many organisations keep cost accounts. This means that they need two sets of books: a financial accounting system for recording items such as the purchase of raw materials, payment of expenses and revenue collected, and a cost accounting system so that the total production costs can be accumulated and allocated to cost units.
KeywordsAccounting System Creditor Trade Cost Account Financial Accounting Control Account
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