Integrated Accounting System is a method where financial accounting and cost accounting records are maintained together in a single unified set of books. Each transaction records both its financial effect and costing effect simultaneously, enabling complete and real-time information without duplication. It helps organizations in achieving better cost control while complying with financial reporting requirements without maintaining separate systems.
Key Features:
- Single ledger system combining both financial and cost records.
- Maintaining Cost Control Accounts such as Stores, WIP, and Finished Goods.
- Integration of Cost Centers and Cost Units into financial transactions.
- No reconciliation needed between financial and cost profit.
- Preparation of Financial Statements and Cost Reports quickly and efficiently.
Example Journal Entries:
| Transaction | Journal Entry | |
| Purchase of Raw Material | Stores Ledger Control A/c To Creditors A/c |
Dr |
| Issue to Production | Work-in-Progress Control A/c To Stores Ledger Control A/c |
Dr |
| Payment of Wages | Wages Control A/c To Bank A/c |
Dr |
| Labour Charged to Jobs | Work-in-Progress Control A/c To Wages Control A/c |
Dr |
| Factory Overheads Absorbed | Work-in-Progress Control A/c To Factory Overhead Control A/c |
Dr |