Skip to content

CA Intermediate · Cost and Management Accounting · Cost Accounting Systems

Under an integrated accounting system, a manufacturing company maintains a single set of books in which cost and financial transactions are recorded together. Which of the following is a defining feature of such a system?

In an integrated accounting system one set of books records both cost and financial transactions. Because there is a single profit figure, no reconciliation statement between costing profit and financial profit is required, unlike the non-integrated system with separate ledgers.

  1. ASeparate cost ledgers and financial ledgers with a Costing P&L Account for reconciliation
  2. BNo separate reconciliation statement between cost and financial profits is needed because both are recorded in one set of booksCorrect
  3. CCost accounts are maintained only for abnormal items
  4. DFinancial accounts are prepared only at the year end from the cost records of a sister concern

Explanation

Integrated accounting uses one set of books for both cost and financial data, so the profit is the same and no reconciliation is needed. Option A describes non-integrated (separate) systems, which require reconciliation.

Did you get it right without looking?

One question tells you little. A timed set on Cost Accounting Systems shows your real accuracy, how long you take and where you lose marks.

Practise Cost Accounting SystemsFree diagnostic mock

More Cost Accounting Systems questions