Under this accounting system transactions are classified both according to their function and nature.”
Integrated accounting should be configured in a way that while it can provide information for cost of each unit, batch or job or any other measurable unit it should not distort financial statements viz., Profit and Loss Account and Balance Sheet.
The purchase of raw material can be directly posted into Stores Ledger Control Account, Work-in-progress Ledger Control Account or Overhead Account in-stead of Purchase account.
Because of auto reconciliation of cost accounting with financial accounting, management reporting will be quick and accurate and it will help in timely decision making.
It simplifies and improves internal control mechanism
All cost related figures are basically derived from financial records so when it is directly linked to financial accounting, it is more reliable and accurate.