What is the difference between cost center elelment and a GL account

sreevani

Sep 16th, 2005

G/L Account is classifiend into expences and revenues.In FI module the term GL Acount is used and in CO Module the term CostCenter is used.Both r having same meaning

SrinivasG

Feb 11th, 2006

Not all G/L accounts are supportive to cost elements e.g asset g/l and liability g/l cannot be taken for controlling purposes.
Hence, only Cost and Revenue G/L accounts are Cost elements. Cost elements enable data flow to controlling where as G/l accounts are the datawarehouses by them selves for FI purpose.

peter

Jun 3rd, 2006

sreevani Wrote: G/L Account is classifiend into expences and revenues.In FI module the term GL Acount is used and in CO Module the term CostCenter is used.Both r having same meaning

satyann

Sep 10th, 2006

hai
gl account and cost centre element appears to be the same. however, there is a lot of difference in between them. the main difference is the glaccount balance canot be used for any allocation, distribution purpose. however, the cost centre element can be allocated and distributed from one object to another object.
this is the subtle difference.
regards,
satya

Dhapena
Profile Answers by Dhapena

Aug 11th, 2015

There are two modules related to this question which are "Financial Module" (FI) and "Cost Controlling Module" (CO). We need to understand the fundamental differences between such modules as follows;
1. General Leger (GL) is using for FI module which will take an account on the financial terms like "Profit & Loss Account", "Balance Sheet Account", whereas
2. Cost Code (CC) is using for CO module which will define the location where those revenue and/or expenses occuring in the "Profit & Loss Account" appear, for example, fasctory department, architectural department, building service department.
3. Using of CC will benefit for controlling the cost in any areas of expenses whether relied on the planned budget or not.
4. Using of GL, in another hand, will see more large view of accounting terms (including of profit and loss, cashflow, asset & liability & equity).
In practical use, we can insert CC account together with any GL account for detailed information. For instance, we bought 100 tons of rebar for concrete structure of building A1 (in total of 3 buliding; A1, A2, A3), we define this expense in GL account as "Material Expenses" (GL no. 20100101) and "Material Cost for Concrete Structure of Building A1" (CO no A1-1001-0010), for example, so that we can complete both FI and CO in one time of purchase requisition.