Final answer:
True, the cost accounting system includes performance and budget reports. These reports aid in financial monitoring, control, and planning, essential for a company's financial decision-making.
Step-by-step explanation:
True, reports generated by the cost accounting system indeed include both performance reports and budget reports. Performance reports are used by management to compare actual company results with planned objectives, which helps them understand where efficiency can be improved and to manage financial performance. Budget reports, on the other hand, are a way for companies to plan future expenses and revenues, acting as a financial plan and providing a benchmark against which actual performance can be measured.
Cost accounting systems are designed to collect, analyze, summarize, and evaluate various alternative courses of action to assist the management team in its decision-making process. Both performance and budget reports form an essential part of the managerial decision-making toolkit, enabling effective monitoring, controlling, and planning of corporate finances. Hence, it is crucial for students of business and accounting to understand the role of these reports within the broader scope of a company's financial decision-making strategies.