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Reconciliation of Cost and Financial Accounts Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM COST ACCOUNTING INTERVIEW QUESTIONS RECONCILIATION OF COST AND FINANCIAL ACCOUNTS INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Reconciliation of Cost and Financial Accounts Interview Questions & Answers - Learning Mode

Reconciliation of Cost and Financial Accounts is process to find all the reasons behind disagreement in profit which is calculated as per cost accounts and as per financial accounts. There are lots of items which are shown in the profit and loss account only when we make it as per financial accounting rules.

Try Reconciliation of Cost and Financial Accounts Interview Questions & Answers - Exam Mode

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Reconciliation of Cost and Financial Accounts Interview Questions & Answers - Learning Mode
Try Reconciliation of Cost and Financial Accounts Interview Questions & Answers - Exam Mode
Question: What is the current practice for reconciliation in accounting?

Answer: There are no specific regulations mentioned by IAS, ICAW, IAS and HMRC. GAAP provide different rules in regards to reconciliation to balance different types of accounts. According to GAAP, account reconciliation is a process that is performed through account conversion or double-entry accounting. Source: CoolInterview.com
Question: Can Computer Accounting Obviate the Need of Reconciliation?

Answer: Computer accounting has not at all obviated the need to reconcile cost accounts and financial accounts as the basic approach in the preparation of the two sets of accounts is different. Many items like notional expenses and appropriation of profit may be recorded in one set of accounts but not in the other. As such difference in profit as revealed by the two sets is bound to arise. Hence the need to reconcile the two sets of books arises to identify the causes of difference and establish their a Source: CoolInterview.com
Question: What is reconciliation?

Answer: A procedure for confirming the reliability of a company?s accounting records by regularly comparing [balances of transactions]. An account reconciliation may be prepared on a daily, monthly, or annual basis.? Source: CoolInterview.com
Question: Explain briefly Memorandum Reconciliation Statement?

Answer: Reconciliation can also be done by preparing a Memorandum Reconciliation Account. This account is a memorandum account only and does not form part of the double entry.When reconciliation is attempted through Memorandum Reconciliation Account, profit to be taken as ?base profit? is shown like opening balance of this Account. All items of differences required to be deducted are debited and those to be added are credited to this Account,the balancing figure of this Account is the profit shown by ot Source: CoolInterview.com
Question: What are the methods of reconciliation?

Answer: Reconciliation of costing and financial profits can be attempted either:
(a) By preparing a Reconciliation Statement or
(b) By preparation a Memorandum Reconciliation Account.
Source: CoolInterview.com
Question: What are the benefits of reconciling?

Answer: a)Mitigates mistakes which have been made by financial institutions or if there have been any fraudulent withdraws from an account.
b)Helps create an overall image on spending and helps access if a person is overspending on fees.
Source: CoolInterview.com
Question: What are the items which have to be added while preparing a reconciliation statement?

Answer: (i) Items of income included in financial accounts but not in cost accounts.
(ii) Items of expenditure (as interest on capital, rent on owned premises etc.) included in cost accounts but not in financial accounts.
(iii) Amounts by which items of expenditure have been shown in excess in cost accounts as compared to the corresponding entries in financial accounts.
(iv) Amounts by which items of income have been shown in excess in financial accounts as compared to the corresponding entries Source: CoolInterview.com
Question: What are the items which are to be deducted while preparing a reconciliation statement?

Answer: (i) Items of income included in cost accounts but not in financial accounts.
(ii) Items of expenditure included in financial accounts but not in cost accounts.
(iii) Amounts by which items of income have been shown in excess in cost accounts over the corresponding entries in financial accounts.
(iv) Amounts by which items of expenditure have been shown in excess in financial accounts over the corresponding entries in cost accounts.
(v) Under-absorption of overheads in cost accounts.< Source: CoolInterview.com
Question: What is GAAP?

Answer: GAAP (The Generally Accepted Accounting Principles) are a set of accounting principles, procedures and standards that organisations use in order to compile their financial statements. GAAP states that the purpose of account reconciliation is to provide accuracy and consistency in financial accounts. To ensure all cash outlays and inlays match between cash flow statements and income statements it is necessary to carry out reconciliation accounts. Source: CoolInterview.com
Question: State the differences in which reconciliation can be avoided?

Answer: The reconciliation of cost and financial books can be avoided if the maintenance of two sets of books to cost accounting and financial accounting is dispensed with. This can be done by adopting integral or integrated accounts in the organisation wherein only one set of books is operated recording both financial and cost accounts.
Source: CoolInterview.com
Question: What is the need for reconciliation?

Answer: In those concerns where there are no separate cost and financial accounts,the problem of reconciliation does not arise.But where cost and financial accounts are maintained independent of each other,it is imperative that periodically two accounts are reconciled. Though both sets of books are concerned with the same basic transactions but the figure of profit disclosed by the former does not agree with that disclosed by the latter. Source: CoolInterview.com
Question: What is a reconciliation statement?

Answer: When reconciliation is attempted by preparing a reconciliation statement, profit shown by one set of accounts is taken as base profit and items of difference are either added to it or deducted from it to arrive at the figure of profit shown by other set of accounts.
Source: CoolInterview.com
Question: What are the reasons for differences in profits or losses between cost account and financial accounts?

Answer: The disagreement between cost and financial accounts results arise due to the following reasons:
1.Items shown only in financial account
2.Items shown only in cost account
3.Over or under absorption of overhead.
4.Difference in valuation of stock.
5.Difference methods of charging depreciation.
6.Abnormal gain or loss. Source: CoolInterview.com

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