Economics · Accounting
Which of the following statements accurately describes the relationship and functional difference between Financial Accounting, Cost Accounting, and Management Accounting?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1All three branches are strictly governed by the Income Tax Act, 1961, and focus solely on historical, monetary data for statutory compliance.
- 2Management Accounting is a statutory requirement, focused on preparing standardized reports for external stakeholders like the RBI.
- 3Cost Accounting is a specialised branch that provides detailed cost information, primarily focused on ascertainment and control of cost for internal reporting.✓
- 4Financial Accounting is a subset of Cost Accounting, and its primary objective is internal decision-making.
Correct answer
Cost Accounting is a specialised branch that provides detailed cost information, primarily focused on ascertainment and control of cost for internal reporting.
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