Question

Discuss 5 reasons for reconciliation between cost and financial accounting.

Answer 1

The reasons for reconciliation of Cost and Financial Accounting are

1. Revealing the reasons for difference in profit or loss between cost and financial accounts.

2. Checking the arithmetical accuracy of both sets of accounts as well as to detect errors and omissions committed in the accounts.

3. Ensuring the reliability of cost accounts in order to correct ascertainment of cost of production.

4. To check errors or fraudulent activity.

5. Different treatment of item