The working of the account transactions are shown in a cost accounting software. Home users will make the most of this amazing application by by use all the functionality offered. They contain modules such as trial balance, accounts payable, payroll, accounts receivable, billing, electronic processing of the payment and many more. The accounting system contains several categories and they are as follows.

• Personal Accounting for Home Users

• Low end business applications which are inexpensive

• Better secured option of med market software

• High End Specific Software

• Vertical Market software is customized to suit the requirements of the company.

• Hybrid solutions combine two or more categories of applications to provide enhanced features to the user.

Cost Accounting Software consists of various components for the working of the system. The functionality of the system is distributed in five parts. The following are the five points based on which the system works.

• Input Measurement basis – The type of input taken in the system.

• Evaluation of inventory with the help of different attributes known as inventory valuation method

• Various applications with difference in efficiency and priority can be designed using cost accumulation methods.

• The flow of cost is determined by various methods and it is used to design unique applications.

• From time to time, inventory cost flows are recorded.

The input base determines the type of input flowing through the components of the cost accounting software. The variation of the input parameters are three in number and they are as follows.

• Cost variation is not taken into account when dealing with the pure historical input type. Only the actual cost of the inventory is taken into account and software is designed.

• Normal Historical base is little different from the pure historical base as the input base takes both the historic and the variant values. Factory overhead variance is calculated and used as an input.

• The third type of input measure is the standard input in which only the variance is taken into consideration while designing the software.

The following are the four valuation methods used in the cost accounting software.

• Throughput is one of the methods of valuation and it is placed first in this list as it is least effective.

• Direct method is otherwise known as variable method and is considered to give better results than the throughput.

•Full absorption type of analysis – This is another traditional type of method in which an exhaustive approach is used to find whether the approximation of administrative and selling costs.

• Activity based method is the greatest among all other types of methods. It is one of the exhaustive approaches with great efficiency as it is based on the various activities.

There are four types of cost accumulation methods and they are back flush, process oriented, job order and hybrid methods. The cost flow assumptions are three in number and the choice of which determines the uniqueness of the cost accounting system. The three types are FIFO ordering, standard identification and the weighted average. The intervals on which the cost recording is based are of two types and they are periodic and perpetual.