Which term describes the setup where financial accounting and cost/management accounting use different systems?

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

Answer: (C)

Two separate information systems serve different purposes: financial accounting focuses on external financial reporting and compliance, while cost/management accounting is geared toward internal decision-making, costing, budgeting, and performance analysis. When these two areas operate on different systems but are linked so data can flow between them, the arrangement is known as interlocking systems. This term captures the idea that the systems are distinct yet connected, requiring reconciliation to ensure consistency between external accounts and internal management information. If the situation were that a single system handled both sets of information, we would call it an integrated system. A wages control account is a payroll control mechanism within financial accounting, not about using separate systems. Bookkeeping is the process of recording transactions, not describing how the accounting functions are structured.