1. RECONCILIATION OF COST & FINAL ACCOUNTS

2. RECONCILIATION STATEMENT
In this method
Profit shown by one set of accounts(either cost or financial accounts)
is taken as a Base Profit &
items of difference are either added to it or
Deducted from it to arrive at the figure of profit shown by other set of accounts.

3. WHEN PROFIT AS PER FINANCIAL ACCOUNTS OR LOSS AS PER COST ACCOUNTS IS TAKEN AS A BASE

4. Items that are to be DEDUCTED
Items of Expenditure included in cost accounts but excluded from financial accounts.
Items of Income included in financial accounts but not shown in cost accounts.
Over absorption of overheads in cost accounts.
Amount by which closing stock is undervalued in cost accounts

5. Amount by which opening stock is overvalued in cost accounts.
Overcharge of depreciation in cost account.
Amounts by which items of expenditure have been shown in excess in cost accounts as compared to the corresponding entries in financial accounts.

6. Items that are to be ADDED
Items of Expenditure included in financial accounts but excluded from cost accounts.
Items of Income included in cost accounts but not shown in financial accounts.
Under absorption of overheads in cost accounts.
Amount by which closing stock is overvalued in cost accounts

7. Amount by which opening stock is undervalued in cost accounts.
Undercharge of depreciation in cost account.
Amounts by which items of expenditure have been shown in excess in financial accounts as compared to the corresponding entries in cost accounts.