Which term describes a situation where financial accounting and cost/management accounting use separate systems?

Which term describes a situation where financial accounting and cost/management accounting use separate systems?

• A. Integrated systems
• B. Wages control account
• C. Bookkeeping
• D. Interlocking systems

Answer: (D)

When financial accounting and cost/management accounting operate on separate systems, they stay distinct but connected so data can move between them as needed. This arrangement is called interlocking systems. It allows each side to serve its purpose—external financial reporting and compliance for financial accounting, internal decision-making for management accounting—while still sharing essential information through reconciliations and interfaces. The idea contrasts with integrated systems, which would be a single unified system; a wages control account is a payroll sub-ledger, and bookkeeping is the act of recording transactions, not describing how the two streams are structured.

When financial accounting and cost/management accounting operate on separate systems, they stay distinct but connected so data can move between them as needed. This arrangement is called interlocking systems. It allows each side to serve its purpose—external financial reporting and compliance for financial accounting, internal decision-making for management accounting—while still sharing essential information through reconciliations and interfaces. The idea contrasts with integrated systems, which would be a single unified system; a wages control account is a payroll sub-ledger, and bookkeeping is the act of recording transactions, not describing how the two streams are structured.