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CMA Intermediate · Cost Accounting · Integrated Accounting System

Which of the following is NOT an advantage usually claimed for an integrated accounting system over a non-integrated system?

Retaining a separate Cost Ledger Control Account is not an advantage of integrated accounting. That account belongs to the non-integrated system, where separate cost books must be tallied with financial books. Integrated accounting uses one set of books, avoiding duplication and reconciliation.

  1. AAvoidance of duplication of clerical effort in recording transactions
  2. BElimination of the need for a reconciliation of cost and financial profit
  3. CQuicker availability of cost information along with financial accounts
  4. DRetention of a separate Cost Ledger Control Account to tally the two sets of booksCorrect

Explanation

The Cost Ledger Control Account (General Ledger Adjustment Account) is used in non-integrated systems to link separate cost books to financial books. An integrated system has a single set of books, so this account is not needed. The other three are recognised advantages.

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