period accounting and cos accounting

[Former Member]

hi,

1 may i know what is the difference of period accounting and cost of sales accounting?

2 cost of sales equals to cost of goods sold?

thanks

[Former Member · Accepted solution]

Hello

Period accounting means that during the month or period, all and only actual events / transactions are posted in the appropriate period. At the end of the period estimated accruals and deferrals are made and posted to that posting period to give a more accurate view of profit.

costs of sales consider all expenses against the actual sale at as low a level as possible and during the period.This enables the company to get a reasonably accurate view of profitability on a real time basis.This is done by using either standards or estimates for many of the components that make up the "cost of goods sold". Any variations from the standards are usually posted through to the cost of sales system either at monthend or when they occur.

Regards

Dinabandhu

[Former Member · Accepted solution]

hi,

1) means cost of goods sold is standard cost?

2) Any variations from the standards are usually posted through to the cost of sales system either at monthend or when they occur.

what is cost of sales system that you refer to?

thanks

[Former Member · Accepted solution]

meaning.....the procedure which roll up the variance to next level at month end.

regards

dinabandhu

[Former Member]

Cost of Sales accounting refers to the way that the Americans account. Their overheads are grouped into different functional areas, manufacturing, sales, marketing, etc.

CoS = COGS yes.

They are both equal to Cost of sales at standard, which is Qty sold X Std Cost Est. + Variances, plus adjustments.

What is in variances (production variances, purchase price variances, cost centre variances?) is subject to customer requirements.