Dear Ashwini
To add to Ajay Sir's reply: When you post any expenses to FI system asks to to provide a CO object at that time you need to supply a co object usually a CC. using this object you are able to see the detail of expense as which department (CC) is taking what share. And that is possible only through CO in convenient way.
This way all expenses for which you have created a cost element are replicated in CO for management reporting purposes.
Usually entries flow from FI to CO with exception of WIP and production variance entries which flows from CO to FI.
Regards
Rajneesh Saxena