CMA Intermediate · Cost Accounting · Cost Book-Keeping
In a non-integral system, which account in the cost ledger is the contra account that makes the cost ledger a self-balancing set of books?
The Cost Ledger Control Account, also known as the General Ledger Adjustment Account, is the contra account in the non-integral system. It receives the other side of every entry that originates in financial books, which makes the cost ledger self-balancing without personal accounts.
- ACosting Profit and Loss Account
- BCost Ledger Control AccountCorrect
- CWork-in-Progress Control Account
- DOverhead Adjustment Account
Explanation
The Cost Ledger Control Account, also called the General Ledger Adjustment Account, records the effect of items that arise in the financial books, such as purchases and wages paid. It keeps the cost ledger self-balancing. The costing profit and loss account only records the cost profit, not the contra for all entries.
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