Traditional management accounting practices tend to overlook potentially significant costs and benefits within relevant cost decision making because:

Question

Quizplus · Accepted Answer

A) Accounting recognition is delayed when costs are contingent on future events
B) Relevant revenues and costs are not isolated in the accounting system
C) Opportunity costs are not measured
D) All of the above.

B) Relevant revenues and costs are not isolated in the accounting system - this means that traditional accounting practices do not separate relevant revenues and costs from irrelevant ones, potentially leading to incorrect decision making.

C) Opportunity costs are not measured - opportunity costs are the costs of an alternative foregone when making a decision, and are often not measured by traditional accounting practices.

Therefore, all of the above are reasons why traditional management accounting practices tend to overlook potentially significant costs and benefits within relevant cost decision making.

Traditional Management Accounting Practices Tend to Overlook Potentially Significant Costs