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CA Intermediate · Cost and Management Accounting · Cost Accounting Systems

In a company following integrated (integral) accounting, which of the following is a feature of the system?

Under integrated accounting, one set of books captures both cost and financial transactions from the same source documents. Because only one profit figure arises, there is no need for a reconciliation statement between cost and financial profits, unlike the non-integrated system with separate ledgers.

  1. ACost and financial accounts are kept in separate ledgers and reconciled periodically
  2. BA single set of books records both cost and financial transactions, so no reconciliation statement is requiredCorrect
  3. COnly cost accounts are kept and financial accounts are derived from the notional ledger
  4. DA Costing Profit and Loss Account is prepared in addition to the financial profit and loss account to be reconciled

Explanation

Integrated accounting merges cost and financial records into one set of books, using a common source of data. Since there is only one profit figure, no reconciliation is needed. The other options describe non-integrated (separate ledger) systems where reconciliation is required.

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