Page 209 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes  Financial Statements: These statements provide the information regarding the data of
actual performance with budgeted figures and comparative statements containing
information over a period.
 Tabulated Information: Information related with expenditure, production, sales and
distribution is furnished in the form of tables so that the data can easily be analysed.

 Accounting Ratios: Accounting ratios play a vital role for the interpretation of
accounting and financial statements. Different liquidity ratios, profitability ratios,
efficiency ratios and capital structure ratios may be used for this purpose.
2. Graphic Reporting: Graphic reporting is very common in these days to present information
to the management. These reports can be submitted in the form of graphs, diagram,
pictures and charts. They are prepared when quick action is needed.
The common charts and diagrams usually included in a report are:
(i) Line Graphs: To show, for example, cumulative actual sales against budget and/or
against previous year’s actuals;
(ii) Bar Charts: Generally used for showing comparison of month-wise sales and expenses
– budgeted and actuals;
(iii) Pie Charts: Commonly used to show in a circular diagram the distribution of the
total sales revenue among costs, profits as also the total costs among the different
constituent elements.
3. Oral Reporting: Oral reporting may take place in the form of (1) Group meeting,
(2) Conferences, and (3) Individual talks. These oral meetings cannot be part of important
decisions, but they furnish a common platform to discuss the problems genuinely. For
decision- making the written reports have an upper hand over all types of reports.

11.5.1 Essentials of Successful Reporting

Business report is a media of communication that contains factual, correct and clear information
and it should be able to add to the knowledge of the recipient. It should be easy to understand
the problem of the event reported to him. Accounting reports become ideal if they follow the
following guidelines:

1. Content and the shape: While making a draft of the report the following heads should be
kept in mind:

 Suitable title: Title should be short and suitable to the content.
 Time: It should give time and the person for whom it is prepared.
 Facts: Report should contain facts and not the opinions.
 Totals: Where statistics are required, only relevant data should be provided and
details may be given in appendix.
 Objectives: Contents should serve the purpose for which it is prepared.
 Synchronise: The contents should be in logical sequence.
2. Precise: Report should not be lengthy. It should be precise, specific and concise. It should
not contain irrelevant matter. If details are necessary then they should be included in
appendix.

3. Accuracy: The information provided in the reports should be accurate.

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