AIOU SOLVED ASSIGNMENT 1 CODE 462 COST ACCOUNTING


AIOU SOLVED ASSIGNMENT 1 CODE 462 AUTUMN 2016

Aiou solved assignment 1 code 462 autumn 2016 for cost accounting of B.Com. This is aiou solved assignment # 1 for code 462 for the semester autumn 2016. This is also called as:- solved assignment 1 code 462 autumn 2016, code 462 aiou solved assignment 1 autumn 2016, autumn 2016 aiou solved assignment 1 code 462, aiou solved assignment 1 code 462 spring 2017.

AIOU SOLVED ASSIGNMENT 1 CODE 462 AUTUMN 2016 FOR COST ACCOUNTING

Q NO 1:”FINANCIAL ACCOUNTING PROCEDURES ARE GENERALLY DESIGNED TO ASCERTAIN THE PERIODIC PROFIT OR LOSS, BUT THERE ARE IMPORTANT LIMITATIONS AND DEFICIENCIES IN THE SYSTEM”.
ANSWER:-
LIMITATIONS:-
Financial accounting suffers from the following limitations which have been responsible for the emergence of cost and management accounting:
1. Financial accounting does not provide detailed cost information for different departments, processes, products, jobs in the production divisions. Similarly, separate cost data are not available for different services and functions in the administration division. Management may need information about different products, sales territories and sales activities which are also not available in financial accounting.

COST ACCOUNTING CODE 462 AIOU SOLVED ASSIGNMENT 1 AUTUMN 2016

2. Financial accounting does not set up a proper system of controlling materials and supplies. Undoubtedly, if material and supplies are not controlled in a manufacturing concern, they will lead to losses on account of misappropriation, misappropriation, scrap, defectives, etc. They may, in turn, influence the reported net income of a business enterprise.
3. Recording and accounting for wages and labour is not carried out for different jobs, processes, products, departments. This creates problems in analyzing the cost associated with different activities. This also does not provide a basis for rewarding workers and employees for the above-average performance.
4. It is difficult to know the behavior of costs in financial accounting as expenses are not assigned to the product at each stage of production. Expenses are not classified into direct and indirect, and therefore, cannot be classified as controllable and uncontrollable. Control of cost which is the most important objective of all business enterprise cannot be achieved with the aid of financial accounting alone.



AIOU CODE 462 SOLVED ASSIGNMENT 1 AUTUMN 2016

5. Financial accounting does not possess an adequate system of standards to evaluate the performance of departments and employees working in the departments. Standardization is now applied to all elements of business. Standards need to be developed for materials, labour and overheads so that a firm can compare the work of laborers, workers, supervisors and executives with what should have been done in an allotted period of time.

AUTUMN 2016 AIOU SOLVED ASSIGNMENT 1 CODE 462

6. Financial accounting contains historical cost information which is accumulated at the end of the accounting period. This accounting does not provide day-to-day information about costs and expenses. This is the reason why much dissatisfaction has been shown with external financial reporting. Historical cost is not a reliable basis for predicting future earnings, solvency, or overall managerial effectiveness. Historical cost information is relevant but not adequate for all purposes. It is now rightly contended that current cost information should be reported along with historical cost information.
7. Financial accounting does not provide information to analyze the losses due to various factors, such as idle plant and equipment, seasonal fluctuations in volume of business, etc. It does not help management in taking important decisions about expansion of business, dropping a product line, starting with a new product, alternative methods of production, improvement in product, etc. Managerial decisions about these business matters have now become vital for the survival and growth of business enterprises.

AIOU CODE 462 COST ACCOUNTING SOLVED ASSIGNMENT 1 AUTUMN 2016

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