Sunday, August 17, 2008

essentials of a good cost accounting system

Q:- What are essentials of a good cost accounting system ?
Ans :-
Cost accounting system should possess are as follows :
(i) Cost accounting system should be tailor made , practical , simple and capable of meeting the requirement of a business concern .
(ii) The data to be used by the cost accounting system should be accurate , otherwise it may distort the output of the system .
(iii) Necessary cooperation and participation of executive from various departments of the concern is essential for developing a good system of cost accounting .
(iv) The cost of installing and operating the system should justify the result
(v) The system of costing should not sacrifice the utility by introducing meticulous and unnecessary details.
(vi) A carefully phased programme should be prepared by using network analysis for the introduction of the system .
(vii) Management should have a faith in the costing system and should also provide a helping hand for its development and success .

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