Explain the subject-matter of cost-accounting.
Answers
Answered by
0
Subject-Matter of the Cost Accounting Records Rules:
The Companies (Amendment) Act of 1965, under its Section 209(1)(d), incorporates a provision that proper books of account in the case of companies engaged in production, processing, manufacturing or mining activities should include particulars relating to utilisation of material, labour or other items of cost as may be prescribed by the Central Government.
ADVERTISEMENTS:
This provision is in addition to the information relating to all sums of money received and expended, all sales and purchases of goods, and assets and liabilities of a company. But this provision is not applicable to all companies straightway, and depends upon the Central Government who has been empowered to prescribe the rules for the purpose under Section 642 of the Companies Act, 1956.
So, the Cost Accounting Records Rules are framed and introduced by the Central Government in exercise of the powers conferred by Section 642(1) read with Section 209(1)(d) of the said Act in respect of a ‘product’ or a ‘class or products’, or an ‘industry’ or a ‘group of industries’.
In so far as the financial accounts of a company are concerned, the financial statements such as the Profit and Loss Account and the Balance Sheet and other Schedules forming parts of the accounts are uniform. But the Cost Accounting Records Rules are different for different industries and products.
This is due to the methods and processes of manufacture and the nature and extent of activities varying widely from product to product and even from industry to industry.
However, from the statutory point of view, a general pattern of the Cost Accounting Records Rules is discernible.
The Companies (Amendment) Act of 1965, under its Section 209(1)(d), incorporates a provision that proper books of account in the case of companies engaged in production, processing, manufacturing or mining activities should include particulars relating to utilisation of material, labour or other items of cost as may be prescribed by the Central Government.
ADVERTISEMENTS:
This provision is in addition to the information relating to all sums of money received and expended, all sales and purchases of goods, and assets and liabilities of a company. But this provision is not applicable to all companies straightway, and depends upon the Central Government who has been empowered to prescribe the rules for the purpose under Section 642 of the Companies Act, 1956.
So, the Cost Accounting Records Rules are framed and introduced by the Central Government in exercise of the powers conferred by Section 642(1) read with Section 209(1)(d) of the said Act in respect of a ‘product’ or a ‘class or products’, or an ‘industry’ or a ‘group of industries’.
In so far as the financial accounts of a company are concerned, the financial statements such as the Profit and Loss Account and the Balance Sheet and other Schedules forming parts of the accounts are uniform. But the Cost Accounting Records Rules are different for different industries and products.
This is due to the methods and processes of manufacture and the nature and extent of activities varying widely from product to product and even from industry to industry.
However, from the statutory point of view, a general pattern of the Cost Accounting Records Rules is discernible.
Similar questions