Passages relating with general ledger and factory ledger are first recorded in the general ledger and factory diary. The control accounts factory ledger and general ledger are complementary in nature i.e., a charge to one is a programmed credit to the next and the other way around; so they allow every ledger to act naturally adjusting.
It is regularly reasonable for an assembling worry to incorporate a factory ledger in its bookkeeping framework. By and large, this strategy is taken after when producing operations are far-flung from the fundamental office, or when the way of such operations requires a substantial number of records.
A few records identifying with assembling are kept in factory office books while other are kept as a rule office books. What accounts and different records be kept in the factory diary and ledger and what records and records be kept up in the general diary and ledger would rely on upon different elements and the way of assembling concerns. Be that as it may, there are sure records which are typically continued the factory books. These are records worried with assembling costs and incorporate stores or materials records, work or finance accounts, factory overhead records, general ledger, is likewise included on the factory books.
Most associations keep up money and other factory resources on the general office records. Accordingly the general ledger incorporates such records as deals, cost of products sold, factory plant and apparatus, collected deterioration and liabilities and so on. It additionally incorporates the control account, factory ledger.
So as to check the complementary records (factory ledger control account in the general office books and general ledger control account in the factory office books), official vouchers, which are additionally called exchange vouchers, are utilized. Through these official or exchange vouchers, the general office is educated by the factory office; and factory office is educated by the general office.
In cost bookkeeping framework, the volume of bookkeeping information that must be gathered is typically vast. Because of this, many endeavors think that its reasonable to have isolate books at the factory workplaces and general workplaces. By setting up a different gathering of factory records, the financial bookkeeping records are liberated from much detail which are normally fundamental is cost bookkeeping work. The requirement for isolating factory accounts from other bookkeeping information likewise emerges because of the accompanying variables:
a. At the point when the general or managerial workplaces and the factory workplaces are not situated at a similar place or in similar premises or under a similar rooftop.
b. At the point when the decentralization arrangement is to be followed in various generation plants each having its own administration and organization.
At the point when the above conditions are available, it is prudent and worthwhile to keep a few books at the factory workplaces and some at the general workplaces. The general workplaces typically keeps up: All vouchers payable or record payable records, money and records receivable records, offering and authoritative records and so on. The assembling accounts relating with materials or stores, work in process, completed products, work and factory overhead are kept at factory workplaces. At the point when both the workplaces are included, the equal section is passed in the books.