Is there Anyone who could tell me the difference between internal order and cost center.
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they r two different terms. Cost center is a unit which does not produce direct profits to the company.Basically its a work center. Whereas an Internal order is used to accumulate cost for a specific project or task.
cost centre is like a building, geographical area which can produre the accounting reports.. IO is used to monitor and allocate the costs or expenses the company goes through... yes they r completely different and for any sort of such domain accounting questions please refer to accounting principles by weygandt available in torrents..
Lets take an example marketing is a cost center , in this we do lot of activities to cell or promote out product like we will conduct trade fairs exibitions . IN this scenario we will create trade fair as internal order , at the month end we will settle internal order to cost center.
Internal Orders are - Individual costs by individual products.. Ex - in a dept we have a 100 Telephones, internal order will be shown as a each telephone expenses in a department.... Cost Centers are - Group of products with in one account expenses ... Ex - if we have 100 telephones in dept.. it will not shown by each product wise expenses... we will post the entry in dept as telephone exp without mentioning the telephone no.
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