1. Explain the need for reconciliation of cost and financial accounts.
2. Explain the importance of reconciliation of cost and financial accounts. Mention four items of expenses or incomes, which will appear in financial accounts but normally appear in cost accounts.
3. Why is a reconciliation of cost and financial accounts necessary? Under what circumstances a reconciliation statement can be avoided?
4. At the end of an accounting period, it is found that the profit as shown in the financial accounts falls considerably short of the profits according to the cost accounts. Indicate how the discrepancy may have arisen.
5. Indicate the reasons why it is necessary for the cost and financial accounts organization to be reconciled and explain the main sources of difference, which would enter into such a reconciliation.