Costing - Study Mode

[#521] . . . . . . . . arises where the actual process loss is less than the normal predetermined process loss.
Correct Answer

(C) Abnormal gain

[#522] Which of the following affects the flow of funds?
Correct Answer

(C) A transaction affecting current and non-current account

[#523] Cost accounting is based on-
Correct Answer

(C) Double accounting system

[#524] Which of the following statement is true? Statement 1: Financial statements are prepared on the basis of accounting principles. Statement 2: Any changes in accounting principles or method will affect the utility of the financial statements.
Correct Answer

(C) Both 1 and 2 are true

[#525] The type of loss that should not affect cost of inventories is ________.
Correct Answer

(A) normal loss

Explanation

Solution: The type of loss that should not affect cost of inventories is normal loss. loss:The loss expected or anticipated prior to production is a normal process loss. It is thus called a standard loss. A provision for such a loss is made before starting production. Weight losses, shrinkage, evaporation, rusting etc. are the examples of normal loss. Normal loss increases the cost of production of the usable goods realized.