Non-Integral System and Integral System | Cost Accounting

The upcoming discussion will update you about the difference between non-integral system and integral system.

Difference # Non-Integral System:

1. Two separate sets of account books are maintained—one to record cost transactions and the other to record financial trans­actions.


2. Cost Ledger is maintained.

3. Control Accounts are opened in the Cost Ledger.

4. There are two figures of profit or loss—one as per cost accounts and another as per financial accounts.

5. There is need for reconciliation of cost accounts and finan­cial accounts because there are two figures of profit or loss as there are two sets of account books.

6. Balances of Overheads Control Accounts which represent under or over absorption of overheads are transferred to costing Profit & Loss Account.

7. There is duplication of recor­ding the transactions in two sets of account books. It requires more manpower, time and money.

Difference # Integral System:


1. Only one set of account books is maintained to record both the cost transactions and financial transactions.

2. Cost Ledger is not maintained.

3. Control Accounts are opened in the General Ledger.

4. There is only one figure of profit or loss because only one set of account books is main­tained.


5. There is no need for recon­ciliation because there will be only one figure of profit or loss as there is only one set of account books.

6. Balances of Overhead Control Accounts which represent under- or over-absorption of overheads are transferred to Profit and Loss Account.

7. It is economical because it avoids the duplication of re­cording the transactions in two sets of account books.

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