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CA Intermediate · Cost and Management Accounting · Cost Accounting Systems

Which one of the following is a characteristic of an integrated accounting system rather than a non-integrated system?

An integrated system keeps cost and financial accounts in a single set of books, so only one profit figure arises and no reconciliation statement is required. Separate cost ledger control accounts and compulsory reconciliation belong to the non-integrated system.

  1. ACost and financial accounts are kept in one set of books, avoiding a need for reconciliationCorrect
  2. BSeparate Cost Ledger Control Account is maintained for balancing
  3. CReconciliation statement is essential every period
  4. DCost books are kept only for production departments

Explanation

Integrated accounting merges cost and financial records into a single set of books, so there is one profit figure and no reconciliation is required. The other options describe features of non-integrated (separate ledgers) systems or are not features of either.

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