Question

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           Discuss (5) reasons for reconciliation between cost and financial accounting.

q To find out the reason of the difference in the profit or loss in the cost and financial accounts to indicate the position clearly and to be sure that no mistakes pertaining to the accounts have been committed.

q To ensure the mathematical accuracy and reliability of cost accounts in order to have cost ascertainment, cost control and to have a check on the financial accounts.

q To contribute to the standardization of policies regarding stock valuation, depreciation and overheads.

q To facilitate coordination and promote better cooperation between the activities of financial and cost sections of accounting department.

q To place management in a better position to acquaint itself with the reasons for the variation in profits paving the way to more accurate internal control.