CMA Intermediate · Cost Accounting · Integrated Accounting System
In an integrated accounting system, which of the following is the main feature that distinguishes it from a non-integrated system?
The key feature of an integrated accounting system is that cost and financial transactions are recorded together in one set of books. Since there are no separate cost and financial ledgers, no reconciliation statement is needed to explain profit differences.
- ACost and financial transactions are recorded in a single set of books, without separate cost ledgers and a reconciliationCorrect
- BCost records are kept in separate ledgers and tallied with financial books through a reconciliation statement
- COnly material and labour transactions are recorded, overheads are ignored
- DOnly memorandum records are kept for cost, using a Costing Profit and Loss Account
Explanation
An integrated system uses one set of books that serves both financial and cost purposes, so no separate cost ledgers are needed. Because there is a single record, there is no need for a reconciliation between cost and financial profit. The second option describes the non-integrated system.
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