Which of the following is true of cost accounting?
A) It is a subset of management accounting and therefore its information is used only to meet the needs of managers.
B) It is used only by manufacturers.
C) It is part of both management and financial accounting systems.
D) The distinction between management accounting and cost accounting is clear-cut.

Question

Quizplus · Accepted Answer

Cost accounting is a subset of both management accounting and financial accounting. It provides detailed information about the costs of products or services to be evaluated by managers and also provides input to financial accounting systems for external financial reporting purposes. Option A is incorrect as cost accounting is used by both managers and external users. Option B is incorrect as cost accounting can be used by any type of business, not just manufacturers. Option D is also incorrect as management accounting and cost accounting have overlapping roles and responsibilities, and the two terms are often used interchangeably.

Which of the Following Is True of Cost Accounting