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CMA Foundation · Fundamentals of Financial and Cost Accounting · Meaning and Significance of Cost Accounting and its Relationship with Financial Accounting

Which one of the following is a feature that distinguishes cost accounting from financial accounting?

Cost accounting provides detailed cost information for each product, job or process, mainly for internal management, and can be prepared at any frequency. Financial accounting instead reports overall results of the entire business, usually yearly, in a statutory format for external users.

  1. ACost accounting provides detailed cost information per product, job or process for internal management useCorrect
  2. BCost accounting is compulsory for all companies under every circumstance for tax filing
  3. CCost accounting reports only on the whole business at the year end
  4. DCost accounting follows the same rules as financial accounting standards for all reports

Explanation

Cost accounting gives product, job or process-wise cost details mainly for internal management and can be prepared at any interval. Financial accounting reports on the whole business, usually annually, in statutory format for external users.

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