1. Integrated and Non-integrated
Accounts – II
(Journal Entries under Non-integrated System)
Mahesh Chandra Sharma
Associate Professor, Department of Commerce
Shaheed Bhagat Singh Evening College
(University of Delhi)
2. Journal Entries
Cost Books Financial Books
1. Receipts of materials into store (cash and Credit Purchases)
Stores Ledger Control A/c Dr. Purchases A/c Dr.
To General Ledger Adjustment A/c Cost Ledger Control A/c (Memo.) Dr.
To Cash A/c or Creditors A/c
In Stores Ledger: Individual stores Accounts shall be debited.
2. Receipts of materials for direct issue – went to production department directly
Cost Ledger: For Cash /Credit Purchases:
Work-in-progress Ledger Control A/c Dr. Purchases A/c Dr.
To General Ledger Adjustment A/c Cost Ledger Control A/c (Memorandum) Dr.
To Cash A/c or Creditors A/c
Job Ledger: Debit individual Job or Product A/c for which materials have been received
3. Journal Entries
Cost Books Financial Books
3. For issue of direct materials
Work-in-progress Ledger Control A/c Dr. No Entry
To Stores Ledger Control A/c
In Job Ledger: Individual Jobs account shall be debited for which materials have been issued
In Stores Ledger: Individual Store accounts shall be credited.
4.
For issue of indirect materials to factory, office and selling and distribution departments
Cost Ledger:
Works Overheads Control A/c Dr. No Entry
Office Overheads Control A/c Dr.
Selling & Distr. Overheads Control A/c Dr.
To Stores Ledger Control A/c
In Stores Ledger: Individual Store accounts shall be credited.
4. Journal Entries
Cost Books Financial Books
5. For issue of materials for capital work – for creating assets
Capital WIP Control A/c Dr. Asset A/c Dr.
To Stores Ledger Control A/c To Purchases A/c
6. For return of materials/store items to suppliers
Cost Ledger:
General Ledger Adjustment A/c Dr. Creditors A/c Dr.
To Stores Ledger Adjustment A/c To Purchase Returns A/c
To Cost Ledger Control A/c (Memo.)
In Stores Ledger: Individual stores Accounts shall be credited.
5. Journal Entries
Cost Books Financial Books
7. For return of direct materials from production to store
In Cost Ledger
Stores Ledger Control A/c Dr. No Entry
To WIP Ledger Control A/c
In Stores Ledger: Individual Store accounts shall be debited.
In Jobs Ledger: Individual Jobs accounts shall be credited.
8. For return of indirect materials from production to store
In Cost Ledger
Stores Ledger Control A/c Dr. No Entry
To Works Overheads Control A/c
To Office Overheads Control A/c
To S & D Overheads Control A/c
6. Journal Entries
Cost Books Financial Books
9. For transfer of materials from one job (Job No.1) to another job (Job No.2)
In Job or Work-in-Progress Ledger:
Job No. 2 A/c Dr. No Entry
To Job No. 1 A/c
Note: No entry is required in Work-in-Progress Control A/c or Stores Ledger Control A/c.
10. For normal loss of materials
No entry will be required
11. For abnormal loss of materials
Costing P & L A/c Dr. P & L A/c Dr.
To Stores Ledger Control A/c To Purchases or Trading A/c
12. For payment to creditors
No Entry Creditors A/c Dr.
To cash/Bank A/c
7. Journal Entries
Cost Books Financial Books
13. For Wages/Salaries Paid
Wages Control A/c Dr. Wages A/c Dr.
To Gen. Ledger Adjustment A/c Cost Ledger Control A/c (Memo.) Dr.
To Cash or Bank A/c
14. For allocation of direct wages to production
Work-in-progress Ledger Control A/c Dr. No Entry
To Wages Control A/c
15. For apportionment of indirect wages to factory, office and selling and distribution departments
Works Overheads Control A/c Dr. No Entry
Office Overheads Control A/c Dr.
Selling & Distr. Overheads Control A/c Dr.
To Wages Control A/c
8. Journal Entries
Cost Books Financial Books
16. For payment of direct expenses
Work-in-progress Ledger Control A/c Dr. Direct Expenses A/c Dr.
To General Ledger Adjustment A/c Cost Ledger Control A/c (Memo.) Dr.
To Cash or Bank A/c
17. For payment of Factory, Office and Selling & Distribution Expenses
Cost Ledger:
Works Overheads Control A/c Dr. Works Expenses A/c Dr.
Office Overheads Control A/c Dr. Office Expenses A/c Dr.
Selling & Distr. Overheads Control A/c Dr. Selling & Distribution Expenses A/c Dr.
To General Ledger Adjustment A/c Cost Ledger Control A/c (Memorandum) Dr.
To Cash A/c
9. Journal Entries
Cost Books Financial Books
18. For absorption of works overheads to Jobs/Products
In Cost Ledger
Work-in-Progress Ledger Control A/c Dr. No Entry
To Works Overheads A/c
In Job or Work-in-Progress Ledger:
Individual Jobs/Product accounts will be debited.
19. For absorption of office overheads to Jobs/Products
In Cost Ledger
Finished Goods Ledger Control A/c Dr. No Entry
To Office Overheads A/c
In Finished Goods Ledger: Individual Jobs/Product accounts will be debited.
10. Journal Entries
Cost Books Financial Books
20. For absorption of S & D overheads to Jobs/Products
In Cost Ledger
Cost of Sales A/c Dr. No Entry
To S & D Overheads A/c
21. For over-absorption of overheads
Respective Overheads Control A/c Dr.
To Overheads Adjustment A/c OR No Entry
To Costing P & L A/c
22. For under-absorption of overheads
Overheads Adjustment A/c OR Dr. No Entry
Costing P & L A/c
To Respective Overheads Control A/c
11. Journal Entries
Cost Books Financial Books
23. Transfer of Finished Goods completed
Finished Goods Ledger Control A/c Dr. NO ENTRY
To WIP Ledger Control A/c
24. Transfer of Finished Goods sold
Cost of Sales A/c Dr. NO ENTRY
To Finished Goods Ledger Control A/c
25. Transfer of Cost of Sales (of Goods sold)
Costing P & L A/c Dr. NO ENTRY
To Cost of Sales A/c
12. Journal Entries
Cost Books Financial Books
26. For sales
Gen. Ledger Adjustment A/c Dr. Cash/Bank/Debtors A/c Dr.
To Costing P & L A/c To Sales A/c
To Cost Ledger Control A/c (Memo.)
27. For collection of credit sales
No Entry Cash/Bank A/c Dr.
To Debtors A/c
28. For abnormal loss of goods in production process
Costing P & L A/c Dr. P & L A/c Dr.
To WIP Ledger Control A/c To Purchase/Trading A/c
13. Journal Entries
Cost Books Financial Books
29. For abnormal loss of finished goods
Costing P & L A/c Dr. P & L A/c Dr.
To Finished Goods Ledger Control A/c To Purchase/Trading A/c
30. For Net Profit
Costing P & L A/c Dr. P & L A/c Dr.
To Gen. Ledger Adjustment A/c Cost Ledger Control A/c (Memo.) Dr.
To Capital A/c
For Net Loss Capital A/c Dr.
Gen. Ledger Adjustment A/c Dr. To P & L A/c
To Costing P & L A/c To Cost Ledger Control A/c (Memo.)