True or False: Primary cost elements are created in Management Accounting.

Primary cost elements serve as a bridge between Financial Accounting (FI) and Management Accounting (CO) in SAP systems. They represent costs that originate from cost-relevant items in financial accounting, such as expenses from operations, which are subsequently recorded in management accounting for cost analysis and reporting.

Creating primary cost elements is usually a function associated with Financial Accounting rather than solely in Management Accounting. While Management Accounting uses these cost elements for various accounting processes, the creation occurs during the FI configuration. Correctly understanding this distinction is vital, as it highlights the integration between financial activities and managerial reporting within SAP S/4HANA.

In essence, primary cost elements are not exclusively created in Management Accounting; they originate in Financial Accounting while being critical to the costing processes in Management Accounting.