interduction to store keeping

materials received in the store should not be kept at whatever place . Therefore , agonized storing is one basic requirement of materials control that prevent losses from misappropriation, damage ,theft, evaporation , deterioration , leakage or obsolescence of store item , Whatever controlling effort put up by the organization will be loss effective if the item purchase are not kept systematically within the stores . experience shows that in many industrial organization they exercise a stiff control over cash but pay loss or no attention to materials control . It is surprising that they do forget the materials purchase by paying cash. materials can be converted into cash after they have been process into the finish production . So the materials in the store should be considered equivalent to cash . a well equipped store department is necessary to exercise control over materials where functions like collection , arrangement , prevention , distribution and recording of materials movement are carried out .           

Methods of costing

The concept and rules related to determining the cost of a product or service is called costing . There are diffirent method of costing . The process of working is diffiers from business to business . Likewise ,the method of costing are diffirent . For example , the production process foe catton textile and biscuits is different . should be adopted in consideration of the nature of the product . The following paragraph describe the general method of costing :

1. job order costing 
2. process costing 
3. service costing / operating costing 
4. unit costing  method
5.batch costing 
6. multiple costing method etc.

difference bwten financial and cost Accounting

#  basic  purpose of financial accounting : 
                                                               The main purpose of financials accounting is to provide information about the financial position of the business concern in a general way . It disclose the position of profit or lose and balance sheet of the concern to woner as well as outside parties .  

basis purpose of cost accounting :
                                                        The purpose of cost accounting is to provide information management for proper planing , control and to take appropriate decision .

# statutory requirement of financial accounting :
                                                                                 financial accounts are prepared as per the requirement of the company act and income tax act . it is compulsory to abide by the low .

statutory requirement of cost accounts :
                                                                 it is kept to meet the requirement of management .it is optional . 

# analysis of expenditure of financial accounting :
                                                                                   it classifies record and analyzes cost according to the nature of expenses . wages salaries ,depreciation ,rent etc good example .

Analysis of expenditure of cost accounting : 
                                                                        it record expenditure in accordance with the purpose for which costs are incurred. it classifies cost as direct and indirect on functional basis.     
 

limitations of financials accounting

cost accounting is a branch of accounting development to do away with with the limitations of financial accounting . Accounting system that maintain the record of financial transaction of a concern is called financial accounting .
       Form the managerial point of view , the information provide by financial accounts is not sufficient . Therefore ,cost cost account was developed . In spite of its utilities and effectiveness , the financial accounting system has the following limitations : 
1. Lack of cost analysis ,
2. Lack of profit analysis ,
3. Historical importance , 
4. Analysis the reasons of losses , 
5. proper measure of efficiency standard, 
6. Inadequate for management ,
7. Lack of materials control , 
8. Determining of selling price , 
9. Analysis of labor cost ,
10. cost reduction .       

Limitations of cost Accounting

In spite of it several advantage cost accounting is not free limitation , which are as follows : 


1. Lack of  uniformity   
                                   Different costing method are used to determine the profit . the result given by cost accounting are more estimate.

2. Join cost  
                   In cost accounting .the major portions of costs are join cost . To determine the cost of a product , join cost should be allocated separately .


3.Expensive 
                    Cost accounting is an expensive system . so only big firms can afford .


4. Development stage 
                                    Cost accounting  principle have not fully  developed . frequently recent concept are tested . For these reasons the principles have not been fully implemented as yet . 

Objectives of cost accounting

The main

objectives of cost account is to analyst the financial activities from which the cost involved could be allocated to each job or process and in the main time the actual  cost of each job or process could be ascertained . these objectives are as   follow: 

1. Ascertainment of cost 

                                        the prime objectives of cost Accounting is to ascertain the cost of product . 

2. To determine selling price 

                                               Cost accounting helps the management  determine the selling price of a product .

3. To help to analyze cost

                                                              Analyzing the cost or a product is another objective of cost accounting . 

4. To control cost 

                             Control is very important to reducing  cost . Here , control may be taken as reducing expenses , increasing working efficiency and minimizing of wages.

5. To reduce cost 

                            supplying quality product at minimum cost is symptom of profitability . 

6. To assist the management 

                                              Another objective of cost accounting is to assist the management by providing factual  information for making appropriate decision and formulating future polices .

7. To assist in preparation of final account 

                                                                      Value of closing stock is compulsory to preparing the final account .    

meaning and definitions of cost Accouuting

Cost accounting has been combined with two words ,'cost and ' accounting ' . The term cost denotes the total of all expenditures involved in the process of production . Accounting , on the other hand , collects and maintain financial records of each income and expenditure and makes the information about it available to the concerned officials . Thus , cost accounting is an art and science of recording , classifying and analyzing the cost involved in raw materials and labor  used in the process of production .cost accounting helps to ascertain the cost per unit , cost per process ,cost per batch cost per department and selling price of a production . 

The information obtained from cost accounting may be used for internal as well as external purpose . 

  Some prominent writers have given their concept of cost accounting . some of the definitions given by them have been reproduced hereunder : 

'' costing is the classifying ,recording and appropriate , allocation of expenditure for the determination of the cost of production or service and for the presentation of suitable arranged data  for purposes of control and guidance of management .'' Harold j. Weldon.

Importance of cost Accounting

One main importance of cost accounting is to overcome the limitations of financial accounting . The following are the importance of cost accounting : 

1. Reveals profitable and unprofitable activities ,

2. Help in cost control ,

3. Helps in decision - making ,

4. Helps in fix selling price , 

5. Helps in inventory control ,

6. Helps in formulating policies ,

7. Helps in cost reduction , 

8. Reveals idle capacity ,

9. Checks the accuracy of financial accounts , ETC.

Objectives of cost accounting

The main objective of cost account is analyze the financial activities from which the cost involved could be allocated to each job or process and in the mean time the actual cost of each job or process could be ascertained . those objective are as follows : 
1. Ascertainment of cost ,
2. To determine selling piece , 
3. To help to analyze the cost ,
4. To control cost , 
5. To reduce cost , 
6. To assist the management ,
7. To assist in preparation of final account , ETC. 

Classification of heads of expenditure

To symplefy the accounting function both in central as well as in opereting level office ., the government expenditure have have been clsssified into different heading . By classifying the expenditure under different head , the government has given a massage to opereting level office that they have to remain strick in that particulars head , when the expenditure are made , for which the budget is a allocated . sinces Fy 2059/60 onward the government has put into operation a new classification in the dead of expenditure by amending the old one . Following are the new classifications of such expenditure : 
1. consummable expenses , 
2. office operation and service expenses ,
3. Grants / subsidy ( current transfer ) ,
4. production nad service expenses,
5. capital transfer expeases , ETC.

(principle and procedures of gon accounting system)''Introduction"

  

     with a view to maintain control and proper utilization of government scarce budget.
   
 1.central level accounting:central level offices refer to ministries.Department.and                  other institutional bodies where the ministry of finance releases the budget directly.     
     
 2.operating level accounting:operating level offices refer to those  offices which operate    either regional level .zonal level or district level offices.

The following accounting  records. statements or reports are prepared and submitted under  operating level accounting:

1.General voucher

2.Bank cash book

3.Budget sheet

4.subsidiary ledger and

5.statement/ or reports

  

'' Forms Used in new accounting system '' ( Accounting system of nepal Government)

In HMG new Accounting system various types of forms are used for different purposes Accounting to their use . They may be categorized three groups : 

A . Forms of primary record :
 i. journal voucher (AGF no. 10 ).
 ii. cash payment slip (AGF no. 6 ). 
 iii. cash receipt  (AGF no. 11).


B . Forms for accounts or ledger :
 i. bank cash book ( AGF no. 5 ) .
ii. Budge sheet (AGF no. 8 ) .
iii. Ledger accounts (AGF no. 22).
 iv. cash received book (AGF no. 23). 
  v. budget summary and  expenditure control A/C (AGF no. 24). 


C . Forms for reports : 
 i. requisition from for the reimbursement of cash payment  (AGF no.6A). 
ii. Monthly report regarding revenue (AGF no. 9). 
iii. Statement of expenditure (AGF no. 13).ETC.

Importance of New accounting system( Accounting system of nepal government)

1. It provides detailed information regarding government revenue and government
     expenditures.

2. It provides necessary data for formulating government policies and program me.

3. It helps to prepare the budget for the next year.

4. It helps to control the government activities.
 
5. It helps to perform audit work.

6. It provides detailed information whether or not the aids.grants, assistance,loan given by        the friendly nations and international agencies are properly used.

Characteristics or eatures of new accounting system ( Accounting system of nepal Government)

1. based on double-entry system principle ,
2. simplicity, 
3. flexibility, 
4. source of financial information ,
5. secrecy , 
6. Guided and control by budget, 
7. based on financial act and rules , 
8. provision of budget transfer ,
9. User of bracket . 
10. Division in central and operating levels ,
11. Emphasis on banking transaction . 

Objectives of new Accountingsystem ( Accounting system of nepal Government)

The Accounts committee constituted by the government stated the following objectives of new Accounting system :

1. to provide basic financial statistics and necessary data required to prepare financial. 

2.To keep control over the available funds and other resources as well as  their expenditures. 

3. To summaries the accounting data to prepare government budget .

4. To determined the level and position of responsible officer involved in different projects and make them accountable.


5. To collect the historical data of budge head.


6.  To provide necessary financial data for audit and investigation of facts so as to evaluate the progress of project .  
     

Evolution of nepal Accounting system ( Accounting system of nepal government)

In Nepal ,the origin of government accounting system may be traced back Lichen period.At that period some sorts of record keeping regarding revenues and expenditures of the government had maintained.As the source of government incomes and expenditures were limited.the then government never felt the need of on elaborated accounting system in the country.During this regime.voluntary labor tax (shramadan) and property or kind tax(jinsikar) collected form the public .were the prime sources of government  revenue.At that period.government expenditures were also limited .construction of temples and renovation of old one.performance of religious works or allocation and arrangement of war more or less the same.government. In malls regime also.the government expenditures were or less the same.however the government explored and added some new sources of revenue.notably custom duty and  business tax.

new Accounting system of government of nepal ( Accounting system of nepal Government)

With the advent of democracy in the country in 2007 BS. Nepal's first priority was to have all round development of the nation . At that period , the USSR had adopted planned economy in the country and has achieved economic from that model .developing countries throughout the world were influenced with this model . They introduce this model in their respective countries and achieve success to a certain extend . Nepal also could not remains isolated from this influence .Therefore , Nepal presented budget in the year 2008 and also executed its first five year plan in the year 2013 . various countries of the world extended their hand in the development process of Nepal by providing grants , donation ,aids, subsidies etc.           

Accounting Equation of important transactions and Explanation

1. Transactions related to capital account .

2. Transactions related to drowsing account .

3. Transactions related to purchase account , purchase return account , cash discount and settlement of creditors ' account .

4. Transections related to sales , sales return account , discount allowed and settlement of debtors' account.

procedure for developing an accounting equation

The steps required for developing an accounting equation are as under :
 step 1 : To find out variables : Each and every transaction affects an accounting equation . The main three elements , assets, liabilities, and capital are included inaccounting equation .

step 2 : To find out effects variablrs : After financing out the variable effected by a transation , the second step  for developing an equation is to find out effects on  variable .

step 3 : Sho the effects on equation : After ascertaining the veriable of a transaction , it is necessary to show the effect on the appropriate side of equation .  

Accounting Equation

Assets are the valuable resources owned by a business . For financial the valuable resources are required . The the value of re sours and sours must be equal . The expression of the equality in the term of equation is known as accounting equation . An accounting equation is expressed as below :
                                                       Resource = source of finance
Resource denotes assets . capital & liabilities are included in the sours of finance .so the  above equation can be expressed in the following ways too :
                                                   Assets = capital + liabilities
                                                   capital = assets - liabilities
                                                   Liabilities = Assets - capitals
Accounting equation is also known as balance sheet equation . Assets ,liabilities and capitals are three basic element of every business transaction . 

Materials purchasing and receiving procedure (Accounting for materials nad stores )

There are a number of procedures involving in purchasing and receiving of materials . The following steps are followed :
A. purchase requisition .
B. Call for tender or quotation .
C. Purchase order .
D. Receiving and inspecting materials .
E. checking and passing of bills for payment . 

Purchase requisition (Accounting for materials nad stores )

A purchase requisition is a formal request for materials to purchasing department , received either from store or production department . On the basis of this purchase reqiusition , the purchasing department purchases materials and supplies for various department .For this , printed forms are used and prepared in triplicate . The first original copy is sent to purchasing materials .

centralizad purchasing (Accounting for materials nad stores )

centralized purchasing means the purchase of materials by a specialized with expert ataffs located at one place . Under this , the purchasing department purchases all the materials for various department and branchese of the organization . This purchasing department is handled nad controlled by a purchase manager or chief buyer .
                            Advanteges of centralized purchasing :
1. Bulk quantity of materials can be purchase at cheaper rate and at a good trade discount .
2. Quantity of materials can be maintained at it purchased by specialized and experience personnel .
3. better handling of store is possible .
4. Better co- ordination and co operation with other department .
5.recording and accounting of materials are easy and economical .
6. Effaective cotrol over materials can be possible .
7. facilitate planning and monitoring timely in delivery of goods .

                                Disadvantege of centralized purchasing :
It involves high initial cost to establish a purchasing department .
1. There may by delay ingetting materials from centralized store to verious department .
2. It is not suitable to those organizetion having branches at different geographycal location .
3. It creates a problem in case of emergency situation .
4. It take time to replace the defective materials .

purchase control (Accounting for materials and stores )

A huge amount of money is invested in purchasing materials by the organization . So it is importance to give due consideration in materials purchasing . Purchase control refers to the purchase of materials of right quality in right quantity at right price in right time form the right sources of suppliers . Purchase control avoids :
1. unnecessary purchase of materials .
2. Over - stoking of materials by unnecessary purchase.
3. Purchase at unreasonable price .
4. delay in delivery of materials .
5.Purchase of inferior quality of materials.
                                                 
                                                             For effective purchase control , the function of purchasing department should be classified and authority should be delegated to persons so that the  accountability can be established .     

Purchasing (Accounting for materials and stores )

Purchasing of materials is one of the important function of materials management and control because it affects the quality of product and involves a major portion of company 's finance purchasing means procuring of materials of right quality and quantity at a right price from the right sources of suppliers at a right time . Therefore a separate purchase department is established to perform these functions .   

store routing (Accounting for materials and stores )

store routing refers to the procedures applied in purchasing material, storing them and issuing to the concerned department . Store routing includes : 
1. purchasing and receiving of materials / materials purchasing and receiving procedure .
2. Storing of materials / store keeping procedure .
3. Issuing of materials / materials issuing procedure .