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Thursday, December 13, 2018

COST CATEGORY

COST CATEGORY

Cost categories are the group for cost center object.

For Example ...

Salesman
Employee
Conveyance, etc.


COST CENTER

Cost center is a single entity that related with a particular "Cost category"

For Example ...
Salesman A, Salesman B, and Salesman C are related to 'Salesman' Category.


Steps To Enable Cost Center & Category
1. Open an already existing company.

2. Go to “Gateway of Tally”

3. Press “F11” key

4. Select “Accounting Features”

5. Set the following options to 'Yes'
* Main Cost Category
* Maintain more than one payroll or cost category





Steps To Create Cost Center & Category

After enabling the "Cost Category and Centers" follow the below steps to create Cost categories and Cost centers.

1. Go to “Accounts info.”


2. Create Cost Categories.



3. Create Cost Centers under selected Cost categories.



LEDGERS FOR COST CENTRES

The cost centers ledgers are helping to enter cost centers transactions in the accounting vouchers.

After creating Cost category and Cost centers, follow the steps to create cost centers ledgers.

1. Click on "Account Info."

2. Click on "Ledgers"

3. Click on "Create"

4. Enter ledger name and group.

5. Make yes to "Cost centers are applicable"



VOUCHER ENTRY

1. Click on "Accounting Voucher"

2. Choose the type of voucher (Payment or Receipt)

3. Enter Expense ledger in payment voucher an Income ledger in receipt voucher.

4. Enter the cost centers with cost category.


5. Enter Cash/Bank in credit side (Payment voucher) or debit side (Receipt voucher).

6. Now save the voucher.






PRACTICE QUESTION

Company name: Amit & Sons

Ledger Entries
Cash a/c Rs. 17,00,000
Cash at bank Rs. 25,000
Bad debts. Rs. 65,000

Cost category: Salesman
Ledger: Conveyance A/c (Amount Rs. 33,500)
Voucher: Payment
Cost Centers
Amount Rs.
Salesman A
5,500
Salesman B
6,000
Salesman C
7,500
Salesman D
8,000
Salesman E
6,500


Cost Category: Bad Debts
Ledger: Bad Debts Recover A/c (Amount Rs. 1,05,000)
Voucher: Receipt

Cost Center
Amount Rs.
A
40,000
B
65,000


Cost Category: Employee       
Ledger: Salary A/c (Amount Rs. 1,12,000)
Voucher: Payment

Cost Center
Amount Rs.
Umesh
25,000
Rajeev
27,000
Priyanka
32,000
Preeti
28,000


Cost Category: Watchman 
Ledger: Bonus A/c (Amount Rs. 26,000)
Voucher: Payment
Cost Center
Amount Rs.
Sunil
5,000
Ramesh
7,000
Raghu
6,000
Akash
8,000


Cost Category: Agent
Ledger: Commission Rec.  A/c (Amount Rs. 34,500) 
Voucher: Receipt

Cost Center
Amount Rs.
Amit
12,000
Vijay
10,000
Krishna
12,500

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