The person executing the contract is known as “contractor” and the person for whom it is executed is known as “contractee”. Contracts are executed as per the specification given by the contractee. The GNP or the gross national product is a related term, which refers to the total market value of all the goods and services produced by a country within a given period of time, usually a calendar year. Contacts are jobs of large sized and may continue over more than one accounting year. 6. Developing stage: cost accounting is in developing stage since its principles, concepts and conventions are not fully developed. Under this method, a batch is treated as one job and the cost of this complete batch is ascertained. Contract costing does not in principle differ from job costing. He continuous operation scouting is classified as: (1) process costing (2) operation costing (3) unit or output costing, (4) service or operating costing and (5) multiple or composite costing.

Cost statements or cost sheets are prepared under which the various items of expenses are classified and the total expenditure is divided by total quantity produced in order to arrive at per unit cost of production. 3. Not helpful in price fixation: financial accounting does not provide proper systems of controlling various elements of cost like materials, labor and other expenses. John Gallemore, associate professor of accounting and Charles E. Merrill Faculty Scholar, studies financial reporting and the banking sector with a focus on the effects of accounting on the behavior of financial institutions and their regulators. If you have a retail or distribution business, you want accounting software that tracks inventory and helps with purchase ordering. Maintains records of wage perfectly: In the archives of database, the information pertaining to salary of employees is stored in a perfect manner within payroll management software. This software provides an all-in-one solution of all the fiscal dealings.

7. Fails to offer cost information: financial accounting does not provides cost information to the management to make plants and decisions as well as controlling the operations. Financial accounting records show an overall profitability of 20% on sales while cost accounting records show a profit of 39.4% AND 41.18% ON Products X and Z respectively while there is a loss of RS. 2. Based on historical information: financial account ting records the past transaction and prepares financial stalemates accordingly. 5. Lack of double entry system: under cost accounting, double entry system is not adopted so, cost accounting does not help to check the arithmetical accuracy of the transaction and locate the errors. The important feature of continuous operating costing is that, the process involves in production of identical units of output and total costs are divided by number of units produced to give the average cost per unit. The units manufactured and uniform and standardized.

The units of output are identical. Contracts are executed at contract site away from contractor’s premises. The contract is executed by the contractor for some agreed amount of consideration known as ‘contract price’. Payroll can be very confusing and daunting and knowing you have deducted the right amount for benefits and tax and you are paying out the right amount can be very daunting for any business owner. 1. Disclose the overall result only: financial accounting disclose the overall result of a business. 8. Fails to ascertain cost of products about losses: financial accounting fails to ascertain cost of products and services due to lack of cost information. Cost control procedure can be adopted by setting standards, but it lack in financial accounting. After your free trial, a paid Sage Business Cloud Accounting subscription at the then-current monthly subscription rate is required for continued use of your Accounting online account.