Skip to content

CA Intermediate · Cost and Management Accounting · Cost Accounting Systems

In an integrated accounting system, the purchase of raw materials worth ₹2,40,000 on credit is recorded through which of the following entries?

The correct entry is Stores Ledger Control A/c debit and Creditors A/c credit for ₹2,40,000. In integrated accounting, one set of books serves both cost and financial purposes, so there is no Cost Ledger Control Account; materials purchased are recorded directly against the supplier.

  1. AStores Ledger Control A/c Dr. 2,40,000 to Cost Ledger Control A/c 2,40,000
  2. BStores Ledger Control A/c Dr. 2,40,000 to Creditors A/c 2,40,000Correct
  3. CWork-in-Progress Control A/c Dr. 2,40,000 to Creditors A/c 2,40,000
  4. DCreditors A/c Dr. 2,40,000 to Stores Ledger Control A/c 2,40,000

Explanation

Integrated accounting combines cost and financial records in one set of books, so no Cost Ledger Control A/c is used. Purchases on credit debit Stores Ledger Control and credit Creditors. Option A is the entry in a non-integrated system. Option C wrongly charges WIP before issue.

Did you get it right without looking?

One question tells you little. A timed set on Cost Accounting Systems shows your real accuracy, how long you take and where you lose marks.

Practise Cost Accounting SystemsFree diagnostic mock

More Cost Accounting Systems questions