Costing - Study Mode
[#221] Costing refers to the techniques and processes of ________.
Correct Answer
(A) ascertainment of costs
Explanation
Solution: Costing refers to the techniques and processes of ascertainment of costs. Costing is any system for assigning costs to an element of a business.
[#222] Cost accounting was developed because of the _________.
Correct Answer
(A) limitations of the financial accounting
Explanation
Solution: Cost accounting was developed because of the limitations of the financial accounting. The limitations of financial statements are those factors that a user should be aware of before relying on them to an excessive extent. The following are all limitations of financial statements: Dependence on historical costs. Transactions are initially recorded at their cost.
[#223] Multiple costing is a technique of using two or more costing methods for ascertainment of cost by _______.
Correct Answer
(A) the same firm
Explanation
Solution: Multiple costing is a technique of using two or more costing methods for ascertainment of cost by the same firm. Multiple costing, also known as composite costing, is a type of accounting method used when goods are sold that contain several other processed parts, and these parts are costed differently.
[#224] Which one of the following is not considered for preparation of cost sheet?
Correct Answer
(B) Goodwill written off
Explanation
Solution: Goodwill written off is not considered for preparation of cost sheet. A firm will write off goodwill when it wants to shrink the balance sheet and if it thinks that the goodwill doesnt represent anything.
[#225] Sale of defectives is reduced from ________.
Correct Answer
(C) cost of production
Explanation
Solution: Sale of defectives is reduced from cost of production. The sale value of scrap may be deducted from the cost of materials consumed or factory overhead.