Can anybody tell me the treatments of the following :-
1. Material issued for capital work in progress
2.Material purchased for direct issue to production
In NON-Integrated accounting system.
1 Replies
Vineet Kumar Singh
(Accounts Officer in Bihar State Power (Holding) Co Ltd)
(264 Points)
Replied 22 March 2011
Capital WIP simply means dat we r investing to form a Capital assets....Take d example of Building A/c.
Entry Pattern:
1.When materilas issued to Capital WIP,
Building A./c Dr..
To SLC A/c (Stores ledger Controll A/c)
2.Material purchase for direct issue to Production:
WIP A/c Dr.
To Cash/Bank A/c.
But in case of Integrated :
WIP A/c Dr.
To CLC ( Costing Ledger Controll A/c ) in case of non integrated..
since in the integrated books...there is no any seperate Cash or Bank ledger maintained,therefore instesd of Cash we pass the entry directly from CLC A/c.
In normal cases, the entry shall be routed through the SLC ledger in this way:
at the time of purchase of material
SLC A/c Dr.
To Cash/CLC (where applicable)
Materials issued to production
WIP A/c Dr.
To. SLC A/c.
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