Question

Discuss the items which are not included in cost accounting

Answer 1

• Gains/ Incomes / Profits

All gains or incomes or profits to be completely ignored except sale of scrap etc. and sale of finished goods.

• Expenses / Losses

a. Financial Expenses :

1. Interest on borrowed funds . Eg : Debenture Interest , Interest on Bank Loan etc
2. Bad Debts and Reserve for Doubtful Debts
3. Discount allowed  and Cash Discount
4. Trade Discount never appears in the books of accounts.

b. Non Operating Expenses

1.  Loss on sale of fixed assets and Investments
2. Abnormal Losses like loss by fire, loss by theft etc
3. All written off transactions like Goodwill written off, Preliminary expenses written off, Other fictitious assets written off
4. Donations and Charities

c. Provision for Tax (Income Tax)

d. Appropriation out of profits