Environmental Accounting

Environmental Accounting refers to the identification, measurement and communication of the data on environmentally responsible performance of a business entity to facilitate economic decision-making.

• True

• false

To assess changes in environment in terms of costs and benefits is one of the objectives of environmental accounting.

• True

• False

All of the environmental costs can be effectively reduce or avoided as a result of better business decisions, ranging from base level to top level, to invest in “green” projects.

• True

• False

The understanding of environmental costs and the performance of processes and products may lead to more accurate costing and pricing which will aid the organizations in developing more environmental friendly products and services in the future.

• True

• False

Environmental financial accounting focuses on material and energy from information as well as environmental cost information.

• True

• False

A technique in environmental management accounting that records material inflows and balances this with outflows on the basis that, what comes in, must go out.

• Input/outflow analysis

• Flow cost accounting

• Activity-based costing

• Lifecycle costing

A technique in environmental management accounting which requires the full environmental consequences, and, therefore, costs, arising from production of a product to be taken account across its whole lifecycle, literally ‘from cradle.

• Lifecycle costing

• Activity-based costing

• Flow cost accounting

• Input/outflow analysis

A technique in environmental management accounting uses not only material flows but also the organisational structure. It makes material flows transparent by looking at the physical quantities involved, their costs and their value.

• Flow cost accounting

• Activity-based costing

• Lifecycle costing

• Input/outflow analysis

A technique in environmental management accounting that distinguishes between environment-related costs, which can be attributed to joint cost centers, and environment‑driven costs, which tend to be hidden on general overheads.

• Activity-based costing

• Lifecycle costing

• Flow cost accounting

• Input/outflow analysis

This is also an internal accounting tool to support Plan-Do-Check-Act (PDCA)  of the firm for sustainable environmental management activities.

• Corporate environmental accounting

• Segment environmental accounting

• Eco balance environmental accounting