What is interlocking accounting System
In interlocking system two set of books of accounts are kept for financial accounting and cost accounting. The results of two books of account may be reconciled by the management.
What is purpose of Interlocking System
1. Detailed Reporting is possible
The management require the more detail reporting regarding the cost of production. These report can be prepared from separate books of accounts maintained for cost purposes.
2. Detailed Analyses
The more information is available under this system about the production cost and therefore more detailed cost analyses can be performed by the management.
3. Timely Reporting
Financial account department carry out the basic accounting work therefore there is not worry to meet the management needs and timely reporting of financial result can be prepared.
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