In the science of accounting, there is a part of the study on the accounting system contained in a company involves determining the prices of goods production, , and other things related to the production process. In general, cost accounting is the process of recording, , classification, and reporting fees to use certain means. The purpose of cost accounting is to help provide information relating to the company management fees. This information can be used to manage the company. So the presence of cost accounting is very important in a company. Inside there is a cost accounting cost accounting cycle. What is a cost accounting cycle and its purpose? Here’s the explanation.
Definition of Cost Accounting Cycle
Cycle cost accounting is the process of providing financial information terdiir of recording data to compile them into a financial statement which is based on the stages in the preparation of financial statements. The financial statements itself is a form of financial information in the form of a debit or credit so easily understood by users of the information. The financial statements also must be relevant, easy to understand and can be compared.
For example, in industrial or manufacturing companies, of course, there are activities such as the production of the production process of processing raw materials into a finished product that is sold to consumers. Viewed from here, it can be seen when the accounting cycle has a sequence in which, among other things:
- Determining the price of the basic raw materials to be purchased and the price of raw materials used in the production process.
- calculate the cost of labor used
- Counting the cost of overhead public
After determining these costs, then the next company can determine the price of the products will be sold to the consumer. To better understand the accounting cycle costs, there are some terms you need to understand first.
- Raw materials, an uatam material is processed into a form of finished products and their use can be identified.
- Raw material costs, the cost of the main material used in the production process.
- Additional materials (helper), a material that can be processed into a finished product but its use can not be identified.
- Surcharge (helper), the cost of additional or auxiliary materials used in the production process.
- Labor costs, the cost of which is used as a merit badge to employees who have worked in the company.
- Public overhead costs, the cost of the production process, but apart from the cost of raw materials and labor costs. It could be argued that these costs into the class of the additional costs such as auxiliary material costs, indirect labor costs, the cost of electricity and water companies, insurance costs and other overhead costs.
After all of the elements in it’s full, then the company can describe the basis of the journaling cycle cost accounting, as follows:
- Noting the production of raw materials used
- Noting the cost of raw materials production
- Noting the wages of employees of companies
- Noting wages in the production process
- Take note of the things included in the overhead factory
- Noting the overhead costs incurred during the production process
- Noting the removal of overhead costs to actual overhead costs.
- Noting the production process to completion
- Record all product production up until the end of the process.
Accounting Cycle Cost Based on Types of Companies
In general, the process cycle cost accounting in a company made up of multiple processes, among others:
- Journaling, noting the transaction amount to evidence in a book catatatan.
- Ledger, the process of classifying or grouping of the nominal value of each account posts. So that the company can determine the balance of each account.
- The trial balance, this usually arranged ahead of the closing of the books. It aims to be able to view the data input in the general ledger is already in line with the general ledger.
- Journal of adjustment, adjust the existing balance on the account with the actual physical count.
- The work sheet, this is done after making adjustments, but the balance is still not balanced. So that the work sheet is used in order to balance balanced.
- The financial statements, after balance balanced the financial statements will be prepared in the form of balance sheet, statement of changes in equity and income statement.
- Journal cover, this is done on some postal accounts that have an influence on changes in equity and income statement.
- Reversing entries, this is the last process in the accounting cycle costs. Inverting journal aims to cover the posts previously closed account.
- Balance beginning or end of the balance sheet, is based on the balance in the balance of the previous period.
Of course, cost accounting cycle which each company will differ from each other. This is because the accounting cycle cost is certainly influenced by the cycle of activities undertaken by the company. Here are some of the accounting cycle cost based on the types of the company.
1. On the Cost Accounting Cycle Trading Company
Cycle cost accounting in the company started trading at the time of purchase the merchandise with no further process and then ends with the resale of such goods to consumers. If the activities of these companies simply buy and sell goods or products, then the cost accounting cycle starting from when the recording of the cost of merchandise purchased. Then end with the presentation of pokokb price of goods that have been sold. The main objective of the accounting cycle costs in the trading company is to present information related to the cost of goods sold, administrative expenses, marketing costs, to other general expenses.
2. On the Cost Accounting Cycle Services Company
Actual cost accounting cycle on the same service company with a commercial company, only difference is the type of work done. If the trading companies to sell goods. But in a service company, which is sold in the form of services. If the company has a stock of merchandise trade, but not by a service company. On the company’s services, the core of its business activities is to provide a service or services. The activity cycle of a service company is in preparation for the delivery of services until the services are already on the users. Then the cost accounting cycle started from the recording costs used for the preparation of the delivery of services and then ended with the presentation of the price of the services rendered to the service user. The purpose of the accounting charge in companies engaged in the service is to provide information about the cost per unit of services used by service users.
3. On the Cost Accounting Cycle Manufacturing Company
In the company’s manufacturing, the activity cycle of the company starts when the processing of raw materials in the production process and ending with delivery of the product to the warehouse. So that the existing accounting cycle costs in manufacturing companies starting from recording the price of raw materials to be processed and then record the expenses incurred such as labor costs, overhead costs, and more. After that, the cycle ends with the present cost of akuntansib cost of the finished product to the warehouse of production.
The purpose of their accounting costs in manufacturing companies is to present the information of the product price per unit which will be marketed. In addition, the accounting cycle costs are also used to follow the production process of the products or goods. Starting from raw materials to enter into a finished product ready for the market. Obviously there are cost accounting cycle should follow from the production process carried out by the company.