Which financial activity involves the assessment of assets, expenditures, and liabilities?

The correct answer is cost accounting. This financial activity specifically focuses on tracking, recording, and analyzing costs associated with a business or project. Cost accounting involves assessing a company’s assets, expenditures, and liabilities in order to determine the cost of products or services. By analyzing these costs, organizations can make informed decisions about pricing, budgeting, and financial planning.

Cost accounting provides detailed insights into the operational efficiency of different departments and helps businesses identify areas where they can reduce costs or improve processes. It is essential for internal management as it aids in setting budgets and evaluating performance.

Other types of accounting mentioned, such as budget planning, fund accounting, and financial accounting, serve different purposes. Budget planning is concerned with developing budgets based on projected revenues and expenditures, while fund accounting primarily deals with tracking and managing financial resources allocated for specific purposes. Financial accounting, on the other hand, focuses on preparing financial statements and reports for external stakeholders, reflecting the overall financial condition of the organization rather than the granular details of cost analysis.