Factory Ledger and General Ledger

Often it is practical for a manufacturing issue to include a general ledger accounting system in his factory. Generally, this procedure is followed when manufacturing operations are far flung from the main office, or when the nature of these operations requires a large number of accounts.

Some accounts are required for the production of books in the office of the factory, while others are kept in books of general office. What accounts and other records to be kept at the factory and journal and ledger accounts and what to be maintained in the general journal and general ledger that depend on various factors and the nature of manufacturing enterprises. However, there are certain accounts that are normally on the books of the factory. These are the accounts that deal with production costs and materials include deposits or accounts, the accounts of the work or payroll, accounts factory overhead, general ledger, is also included on the books of the factory.

Most of the organizations to keep money and other goods factory general office records. So the general ledger includes such accounts as sales, cost of goods sold, plant and machinery factory, depreciation and liabilities, etc. Also includes the account control, accounting factory.

Items related to the general ledger and the factory registration are first recorded in the general ledger and journal factory. The control accounts factory accounting and general ledger are reciprocal in nature ie, a debt of one is an automatic credit to the other and vice versa, to allow a registry to be self-balancing.

In order to verify the reciprocal accounts (Factory Ledger Control Account in the books of general office and control general ledger, accounts books in the office setting), the other good offices, which are also called transfer vouchers are used . Through these bonds between the office and transfer, the general office has informed the factory office, factory and office is informed of the general office.

In the system of cost accounting, the volume of accounting data to be accumulated is typically large. For this reason, many companies are wise to have separate books at the offices of the factory and general offices. With the creation of a separate group of factory accounts, financial accounting records are released from the many details that are usually essential to the job is cost accounting. The need to segregate the accounts factory from the accounting data also arises because of the following factors:

one. When the general offices and administrative offices and factory are not in the same place or in the same room or under the same roof.

b. When the decentralization policy must be followed in a number of plants each having its own management and administration.

When the above conditions are present, it is appropriate and beneficial to keep some books at the offices of the factory and the offices of some generals. The General maintains offices in general: All accounts payable vouchers or account payable, cash and accounts receivables, sales and accounts management etc. relate to materials or manufacturing corresponds stores, work in progress, finished goods, labor and overheads factory are stored in the factory office. When both offices are involved, the voice is passed each other in the books .......