Which of the following cost is also known as overhead cost or on cost. Objective questions on cost and management accounting. Accounting objective type questions pdf download 2020. Basic accounting concepts n matching n revenues and expenses shown on the income statement must be matched for the period. Cost object is a term in budgeting and accounting, referring simply to any item associated with a cost figure of its own. A cost that exists, but is not explicitly stated is best described as. Objective questions cost and management accounting. Cost accounting is defined as the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and the ascertainment of profitability. Which of these is not an objective of cost accounting. Financial accounting is primarily concerned with the preparation of financial statements whereas management accounting covers areas such as interpretation of financial statements, cost accounting, etc. A cost object is often a product or department for which costs are accumulated or measured.
The objectivity principle is aimed at making financial statements more relevant and reliable. Cost and management accounting615a multiple choice. Accountants, cost accounting is the part of management accounting which establishes budgets and standard costs a nd actual costs of operations, processes, departments or products and the. Cost accounting involves assigning costs to cost objects that can include a. This is the key objective of cost accounting to track and analyze the per unit cost of the product produced by the company.
Cost accounting mcqs page is collection of important topicsbased multiple choices questions having four options with most suitable answer. Will contain five essay questions on financial accounting practice. Waec financial accounting questions 2020 objective and. Cost accounting deals with the production, selling and.
This course consists of a discussion of cost accounting concepts and objectives, an indepth study of cost accounting systems and accumulation procedures and a search into the elements of material, labor and factory overhead costs. Every activity that a business firm does must be done for a reason and accounting is no exception. Accounting have been prescribed in the syllabus of cs executive programme with the objective of acquainting the students with the basic concepts used in cost accounting and management accounting having a bearing on managerial decisionmaking. Diagnose financial statements to resolve issues and build financial forecasts. Introduction to cost accounting best practice tests for. Cost accounting may be regarded as a specialized branch of accounting which involves classification, accumulation, assignment and control of costs. The term can refer to any item whose cost may be found by estimation, direct measurement, allocation or apportionment, such as assets. During these 400 years, the purpose of cost accounting needs are served as a small branch of financial accounting except a few like royal wallpaper. Cost object in cost accounting and erp systems examples. Standard costing is universally accepted as an effective instrument for cost control in industries. There are so many objectives of cost accounting such as planning, decision making, stock valuation, profit measurement, control etc.
Detail oriented with exceptionally strong analytic skills. To accumulate, allocate and ascertain cost for each cost object is the primary objective of the cost accounting. A standard cost is a planned cost for a unit of product or service rendered. Plans can be created for the next 12 months based on the relationship between cost objectivecost center and cost centercost type. The factory maintenance department is a cost object for the cost of the maintenance employees and the maintenance supplies. Objectives and functions of cost accounting free download as powerpoint presentation. Accounting helps the company achieve a myriad of objectives. The basic objective of cost accounting is to ascertain cost of cost center. Cost accounting aims at eliminating the loopholes in the production process and ensures manufacturing of goods at the lowest possible cost. For example, the amount of increased profit by introducing a new product is illustrated with the help of cost information.
Cost accounting records supply necessary and adequate information to the management so that the management can frame sound policies on marketing, finance, personnel and the like. Cost has been defined in the terminology given by the chartered institute of management accountants cima as the amount of. The information revealed by cost accounting aims at mainly assisting the management in decision making and optimizing profits. In a practical sense, the main objective of financial accounting is to accurately prepare an organizations financial accounts for a specific period, otherwise known as financial statements. After the contractor has charged all direct costs to contracts or other final cost objectives, indirect costs are those remaining to be allocated to the various cost objectives. Cost accounting mcqs i multiplechoice questions and answers. This helps the organization in cost controlling and making strategic planning and decision on improving cost efficiency.
Accounting standards can seem foreign and arbitrary, but by learning the conceptual framework you will have the conceptual background to understand the theory. It also explains the fundamental processes that should be used. It includes the presentation of information derived therefore for the purposes of. Cost accounting multiple choice questions and answers pdf to download is a revision guide with a collection of trivia quiz questions and answers pdf on topics. Cost accounting brief history objectives functions. After costs have been automatically gathered from invoicing, accounting, production and asset management, start to prepare a budget. Cost accounting is the accounting method for ensuring costeffectiveness by accumulating, organising, recording, calculating, analysing and assessing the overall expenses incurred on a product, process or project, etc. It also helps in the presentation of arranged data for the control purposes and guidance to the management. Chapter 3 explains the cost concepts that are relevant to various different management objectives. Multiple choice questions on basic accounting q1 which accounting concept satisfy the valuation criteria a going concern, realisation, cost b going concern, cost, dual aspect c cost, dual aspect, conservatism d realisation, conservatism, going concern. Objectivity principle examples my accounting course. Thus, cost accounting is a arts as well as science.
Cost accounting includes the presentation of the information derived there from for purposes of managerial decision making. Cost accounting quiz questions and answers pdf, mcqs on basic accounting concepts, standards, accounting principles, balanced scorecard, strategic financial analysis, strategic management, activity based costing, financial accounting, management accounting mcqs with answers, basic variance analysis, pricing, customer profitability. This is a sample pdf of our managerial and cost accounting exam you can view the entire exam 81 pages. The primary objectives of the cost accounting is to ascertain cost of each product, process, job, operation or service rendered. For example, a product is the cost object for direct materials, direct labor and manufacturing overhead. The first function is to control the cost within the. Objectives of cost accounting accountingmanagement. These are the following important objectives of cost accounting. The council of the association of accountancy bodies in west africa abwa recognised the difficulty of students when preparing for the accounting technicians scheme west africa. Cost accounting is the reporting and analysis of a companys cost structure. Tulsian in his book introduction to cost accounting, main objectives of cost accounting are as under. Accounting mcq with detailed explanation for interview, entrance and competitive exams. Cost accounting multiple choice questions and answers. The main objectives of cost accounting are as follows.
The objective of the cost accounting is to determine the methods by which expenditure on materials, wages and overhead are recorded, classified and allocated. Expert knowledge of accounting for manufacturing plant operations. Here is the list of objectives that accounting helps the company to obtain. Here we detail about the meaning, objectives, principles, objections against and evolution and development of cost accounting. Cost accounting multiple choice questions has 1083 mcqs. Which of the following calculate the actual cost of product. Read this article to learn about the definitions, objectives, functions and objections of cost accounting. Cost ascertainment is the process of determining costs after they have. The double entry for a cheque returned by a bank to a customer marked refer to drawer is debit. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by. The other important objective of costing are cost control and cost reduction. Learning objectives after studying this topic, you should be able to. Thus, the following are the main objectives of cost accounting.
A profit centre is a centre a where the manager has the responsibility of. Cost accounting is the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services, and for the presentation of suitably arranged data for purposes of control and guidance of management. Candidates will be required to answer three out of the questions for 15 marks each. Not directly identified with a single final cost objective, but identified with two or more final cost objectives or an intermediate cost objective.
It is science because it is a body of systematic knowledge having certain principles. To understand the meaning of cost accounting, there is need of explaining certain related terms also. Both these types of accounting are examined in the following paragraphs. Such financial statements and ledgers give the management visibility on their cost. The objectivity principle states that accounting information and financial reporting should be independent and supported with unbiased evidence. Accounting concepts, activity based costing and management, balanced scorecard and strategic profitability analysis, balanced scorecard, quality, time and theory of constraints. Cost accounting determines the profitability of each product, process, job, operation or service rendered. Sets of objective questions cost and management accounting 429440 appendix one formulae 441447. Cost accounting is the art and science of recording, classifying, summarizing, and analyzing costs with the objective of cost control, cost calculations and projections and cost reduction thereby helping management make prudent business decisions. Perspectives on cost accounting for government ifac. Cost accounting is the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services, and for the. Cost accounting definition types, objectives and advantages. Cost accounting is a business practice in which we record, examine, summarize, and study the companys cost spent on any process, service, product or anything else in the organization. Knowing the objectives of financial accounting can make the difference between just being a beancounter and really understanding what your business is doing.
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