Explain the steps involved in procedure for reconciliation of Cost & Financial accounts. Also explain the circumstances where reconciliation…

There are 3 steps involved in the procedure for reconciliation. i. Ascertainment of profit as per Financial Accounts ii. Ascertainment of profit as per Cost Accounts iii. Reconciliation of both the profits Circumstances where reconciliation statement can be avoided: When the Cost and Financial Accounts are integrated - there is no need to have a separate reconciliation statement between the two sets of accounts. Integration means that the same set of accounts fulfil the requirement of both i.e., Cost and Financial Accounts.