What types of control accounts are likely to be kept in an interlocking accounting system?

INTERLOCKING SYSTEM:

A system in which cost and financial accounts are differently treated and handled.

Principal Ledgers and Subsidiary Ledgers.

Difference between Integrated and Interlocking system

 

Difference between Integrated and Interlocking system

  Integrated and interlocking system is two cost book keeping methods. Interlocking system maintains two set of ledger which allows detail analyses of costs and cost related processes. Integrated system keeps only one set of ledgers and both financial and cost accounting information needs are met from the same books.  

1. Duplication of record

    In Integrated system there is no duplication of record due to single set of ledgers where in interlocking system there is duplication of record due to two set of ledgers.

2. Cost

  Interlocking system require more resources than integrated system. More time is required to maintain the interlocking system similarly interlocking system requires more human effort than integrated system. More resources require more cost therefore interlocking system is deemed to be more costly than integrated system.  

3. Detailed analyses

  Interlocking system allows more detail analyses of cost and other cost related process. These analyses can be performed without any difficulty and delay due to separate set of ledger.  

4. Avoid confusion

  Interlocking system creates much confusion due to two set of ledger and too much information is being produced from different record and therefore the information management is more difficult in interlocking system. In integrated system this confusion can be avoided.

5. Computerized environment

  Integrated system is the only system followed in computerized environment and detail cost analyses are controlled through coding system (Charts of accounts). Interlocking system has no relevance in the computerized system.

Interlocking accounting system is a system in which company records his transactions on the basis of financial accounting principles and cost accounting principles separately. It means, there will be two records of accounts. One is financial accounts record and second is cost accounts record.

Features of Interlocking Accounting System

1. In interlocking accounting system, two set of accounts are prepared.
2. In interlocking accounting system, all big organisation, take benefits of cost accounts separately from financial accounts. So, it can more control on cost.
3. In interlocking accounting ledger, cost accounts are maintained in cost ledger and financial accounts are maintain in financial ledger.