The process accounts
The process accounts are prepared as follows:
1) The inputs into the processes such as costs of materials, wages and overheads
are debited to the process account. The total cost of the process consisting of
the above, is transferred to the next process on the credit side. The same is
debited to the next process account.
2) An exclusive account is opened for each process and is named or numbered in
the same order of the processes.
3) A process account has two columns- one for units and the other for amount.
4) The output of the final process is transferred to the finished goods stock
account.
5) The output of a process becomes the input of the immediate next process.
6) The following by-products, sale of scrap, wastage etc are credited to the
respective process account, in order to reduce the cost of the process.
