d. Difference due to use of different methods of stock valuation: In financial accounts, the stock of raw materials is valued at cost or market value whichever is lower. Whereas in cost accounts stock may be valued under FIFO, LIFO, Simple Average Cost, Weighted Average Cost, Standard Cost etc The finished goods are valued under absorption existing method in financial accounts. But in preparation of cost accounts, the finished stock may be valued under absorption costing, marginal costing, standard costing etc. e. Difference due to use of different rates of depredation In financial accounts the amount of depreciation is charged as per the rates given in the Companies Act, 1956. But in Cost Accounts, appropriate and suitable method is used for calculation of die amount of depredation. XX XXX Model: Reconciliation Statement Rs. Rs. Profit as per cost accounts (or) Loss as per financial accounts | xxx ADD: 1 Take Income in Financial books XX 2 Take Expenses in cost books XX 3 Excess of income in Financial books over cost accounts XX 4 Excess of expenditure in cost accounts over financial accounts XX 5 Over absorption of overhead in cost accounts XX 6 Under valuation of closing stock in cost accounts XX 7 Over valuation of opening stock in financial accounts XXX LESS: 1 Take Income in cost accounts XX 2 Take Expense in financial accounts XX 3 Excess of income in cost accounts over financial accounts 4 Excess of Expenditure in financial books books over cost accounts 5 Under absorption of overhead in cost accounts Over valuation of closing stock in cost accounts 7 Under valuation of opening stock in cost accounts XX Profit as per financial accounts (or) Loss as per cost accounts XXX Problem: Ascertain the profit as per P&L accounts by preparing a Memorandum Reconciliation Account a) Profit as per costing records Rs. 1,45,000 b) Factory overheads under recovered in cost books Rs 3,500 c) Office overheads under recovered in Financial books R$ 1,500 28 d) Depreciation shows excess in costing books Rs.950 e) Interest on Investments Rs 495 XX XX XX 6 XX XXX s28 f) Receipts of income from share transfer Rs.200 g) Provision made for Income tax Rs. 48500