Basics of Costing

Which of the following best defines 'Cost'?

• The amount spent to acquire something

• The selling price of a product

• The profit earned on a product

• The market value of a product

Costing refers to:

• Recording financial transactions

• Determining the selling price

• Ascertainment of cost

• Budget preparation

Cost Accounting is primarily concerned with:

• Tax computation

• Financial reporting

• Cost control and decision-making

• Asset valuation

Cost Accountancy includes:

• Only cost accounting

• Costing and cost accounting

• Cost accounting and cost control

• Cost accounting, costing, and cost control

Financial Accounting is mainly used by:

• Internal management

• Government agencies

• External stakeholders

• Production departments

Management Accounting focuses on:

• Historical data

• Tax compliance

• Future planning and decision-making

• External reporting

Cost Accounting differs from Financial Accounting in that:

• It is used for tax reporting

• It focuses on cost control

• It is mandatory for all companies

• It deals with external stakeholders

A cost centre is:

• A unit of product

• A location where costs are incurred

• A method of costing

• A type of expense

Cost unit refers to:

• The smallest unit of cost measurement

• The department incurring cost

• The total cost of production

• The profit margin

One major DISADVANTAGE of financial accounting is:

• It provides real-time data

• It focuses on internal control

• It does not provide detailed cost information

• It helps in decision-making