Which of the following types of accounting primarily tracks inventory across the organization?

• A. Financial accounting
• B. Auditing
• C. Tax accounting
• D. Cost accounting

Answer: (D)

Verified step by step guidance

1. Understand the purpose of each type of accounting mentioned in the problem: Financial accounting focuses on preparing financial statements for external stakeholders, Auditing ensures the accuracy and compliance of financial records, Tax accounting deals with tax-related matters, and Cost accounting tracks costs and inventory within the organization.
2. Recognize that inventory tracking is a key component of Cost accounting, as it involves monitoring and managing the costs associated with production, materials, and goods.
3. Recall that Cost accounting provides detailed insights into the cost structure of an organization, which includes inventory management, helping businesses make informed decisions about pricing, budgeting, and resource allocation.
4. Eliminate the other options by considering their primary functions: Financial accounting does not focus on inventory tracking, Auditing is about verifying records, and Tax accounting is centered on tax compliance.
5. Conclude that the correct type of accounting for tracking inventory across the organization is Cost accounting, as it is specifically designed to handle such tasks.