Question

the balance of manufacturing account is called as?​

Answer 1

Answer:

The primary object of accounting is to arrange accounting data in a manner that the amount of profit or loss can be ascertained. It is prepared for a fixed period. For this purpose, we prepare the final accounts. Non-manufacturing entities or the trading entities are engaged in the purchase and sale of goods at profit without changing the form of the goods. Generally, Manufacturing entities prepare a separate Manufacturing Account as a part of Final accounts in addition to Trading Account, Profit and Loss Account and Balance Sheet.

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Answer 2

The balance of manufacturing account represents the manufacturing cost of goods completed

• The key aim of planning Manufacturing Account is to assess manufacturing costs of finished products.
• This helps to improve the cost-effectiveness of production operations. The cost of the finished product would then be allocated to the Trading Account from this account.
• The balance taken down from the production account for a manufacturing company reflects the manufacturing cost of completed products/ finished goods for the particular accounting period.