Solution of Question of Principle of Accounting Grade 12 (NEB 2077 Mangsir)

 

2077/08/04 (19 November, 2020 Thursday) 

Cost Reconciliation Statement

Rules for reconciliation of cost account and financial account

Over and under absorption of overhead

Overhead	Cost account	Financial account
Overhead by cost account	Less profit  (+)	More profit  ( – )
Under absorbed by cost account	More profit  ( – )	Less profit  (+)

 

The difference in stock valuation

Stock	Valuation	Result
Opening stock	More valued	Less Profit (+)
Opening stock	Less valued	More profit  ( – )
Closing stock	More valued	More profit  ( – )
Closing stock	Less valued	Less profit  (+)

The difference in the method of charging depreciation

Depreciation	Result
More charged	Less profit
Less charged	More profit

Expenses or losses shown in only financial account

Discount on issued debentures and shares

Loss on sale of fixed assets

Interest on debentures, loan, mortgage loan and bank loan

Loss on investment

Interest on capital

Expenses for issuing shares or debentures

Penalties for the late completing of contracts

Damage payable

Incomes only shown in financial account

Gain on sale of fixed assets

Collection of dividend

Gain on investment

Interest received from bank

Rent receivable

Transfer fees from shares and debentures

Discount or commission received

Question

9. The net profit as shown by the financial account is Rs. 90,000 on reconciliation the following facts were disclosed: ljQLo n]vf cg';f/sf] d'gfkmf ? (),))) 5 . lx;fa ldnfg ubf{ lgDg tYox? k|fKt eof] .

i. Over valuation of closing stock in cost accounting Rs. 20,000

    nfut n]vfdf clGtd df}Hbft a9L b]vfOPsf] ? @),)))  

ii. Depreciation overcharged in cost account Rs. 10,000

   nfut n]vfdf ¥xf;s§L a9L pNn]v ePsf] ? !),)))  

iii. Interest from investment Rs. 8,000

      nufgLaf6 k|fKt Aofh ? *,)))

Required:

  Reconciliation statement of Cost and Financial Account.

Solution:

Cost Reconciliation Statement

As on ……………………….

Particulars	Detail Rs.	Amount (Rs.)
Profit as per financial account Add: Over valuation of closing stock in cost accounting   Less: Depreciation overcharged in cost account           Interest from investment Profit as per cost account	20,000	90,000 20,000
	10,000 8,000	110,000   18,000
		92,000