Cost concept quiz30.10.2020
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Costs which are ascertained after they have been incurred are known as. Prime cost plus variable overhead is known as. When premises are owned, a charge in lieu of rent is. When amount deposited in a bank is withdrawn for financing a project, the loss of interest on bank deposit will be referred to as.
Which of the following is virtually always after-production cost. A cost per unit which increases or decreases when volume of output increases or decreases is known as.
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Your answer is correct. Your answer is incorrect. Which of the following terms is used to denote the response of a cost to the change in business activity? If the company ships 20, liters, its expected shipping expense would be closest to:. Which of the following terms is correct for a cost that has already been incurred and cannot be changed by any decision?
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You have to finish following quiz, to start this quiz:. Answered Review. Question 1 of A cost that is easily traceable to a cost object is known as:. Correct Awesome! Incorrect Your answer is incorrect. A cost that is not easily or conveniently traceable to a cost object is known as:.
A cost that changes in total dollar amount with the change in the level of activity is known as:. A cost that does not change, in total, with the change in activity is called:.
Mixed cost is also known as:. Which of the following costs is not a product cost? Which of the following costs is not a period cost? The costs incurred to acquire or manufacture a product is known as:. Which of the following costs is treated as indirect labor? The term quality cost refers to:. The costs that are incurred to avoid defects at first place are known as:.
Which of the following costs is an example of external failure cost? The benefit forgone when one alternative is selected rather than another is known as:.Now its time to assess how much you learned about Accounting principle and concepts. We have prepared below MCQs quiz for this chapter. Go and take the quiz to clear your concepts about Accounting principle and concepts.
If you face any difficulty to answer the question we advise you to read this topic thoroughly from the explanation section. We have prepared a multiple choice questions quiz for the students to check their knowledge about Accounting Principles and Concepts chapter. The quiz consists of 10 multiple choice questions. Go through all the questions and then click the submit button to get the result.
Accounting cycle does not include:. One of the following is not the characteristic of Accounting Principles:. Which is not a feature of separate entity concept? Matching concept does not include one of the following:. Realization Concept does not include one of the following features:. According to consistency convention accounting principles should be:. One of the following is not the example of materiality concept:.
Study Notes on Cost: Concept and Classification | Cost Accounting
Save my name, email, and website in this browser for the next time I comment. Decision making. Result Oriented. Business and owner are treated as separate entities.
Personal affairs of the owner should not be considered. Business should not be dissolved in the near future. This concept is followed in all types of business organizations. Going concern may be defined best as:. This concept provides the basis for the formation of the accounting equation.Let us learn about Cost.
After reading this article you will learn about: 1. Concept of Cost 2. Classification of Cost. From the above, it may be stated that cost means the total of all expenses incurred for a product or a service. Thus, cost of an article means the actual outgoings or ascertained changes incurred in its production and sale activities. In short, it is the amount of resources used up in exchange for some goods or services.
The so-called resources are expressed in terms of money or monetary units. What we stated above will not be a meaningful one until the same is used with an adjective only, i. Classification of costs implies the process of grouping costs according to their common characteristics. A proper classification of costs is absolutely necessary to mention the costs with cost centres.
Usually, costs are classified according to their nature, viz. An identical cost figure may be classified in various ways according to the needs of the firms.
Study Notes on Cost: Concept and Classification | Cost Accounting
Under the circumstances, costs are classified into three broad categories Material, Labour and Overhead. Now, further subdivision may also be made for each of them. For example, Material may be subdivided into raw materials, packing materials, consumable stores etc. This classification is very useful in order to ascertain the total cost and its components. Same classification may also be made for labour and overhead. The total costs are divided into different segments according to the purpose of the firm.
That is why costs are grouped as per the requirements of the firm in order to evaluate its functions properly. In short, the total costs include all costs starting from cost of materials to the cost of packing the product. At the same time, administration cost i.
If these functional classifications are not made properly, true cost of the product cannot accurately be ascertained. Practically, costs are classified according to their behaviour relating to the change increase or decrease in their volume of activity.
Fixed Costs are those which do not vary with the change in output, i. It is interesting to note that if more units are product, fixed cost per unit will be reduced, and, if less units are produced, obviously, fixed cost per unit will be increased.
Variable Costs, on the other hand, are those which vary proportionately with the volume of output. So the cost per unit will remain fixed irrespective of the quantity produced. That is, there is no direct effect on the cost per unit if there is a change in the volume of output e.
On the contrary, semi-variable costs are those which are partly fixed and partly variable e. Repairs of building.
Costs may, again, be subdivided into two broad categories according to the performance done by any member of the firm. Controllable Costs are those costs which may be influenced by the decision taken by a specified member of the administration of the firm or, it may be stated, that the costs which at least partly depend on the management and is controllable by them, e.
Uncontrollable Costs are those which are not influenced by the actions taken by any specific member of the management. For example, fixed costs, viz.
Under this condition, costs are classified according to the normal needs for a given level of output for a normal level of activity produced for such output.To browse Academia.
Skip to main content. Log In Sign Up. Moin Uddin. Abdull Su. Jelena Cienta. Rami Ka. Mohamed Ahmed. Indirect materials are generally small activities in an organization: planning, directing items of material such as glue and nails.
They and motivating, and controlling. Planning may be an integral part of a finished product but involves establishing a basic strategy, selecting their costs can be traced to the product only at a course of action, and specifying how the great cost or inconvenience. Directing and c. Direct labor consists of labor costs that motivating involves mobilizing people to carry can be easily traced to particular products.
Indirect labor consists of the labor costs carried out and is appropriately modified as of janitors, supervisors, materials handlers, and circumstances change. Manufacturing overhead includes all performance. Consequently, manufacturing In contrast to financial accounting, overhead includes indirect materials and indirect managerial accounting: 1 focuses on the labor as well as other manufacturing costs.
In the case 3 emphasizes relevance rather than objectivity of manufactured goods, these costs consist of and verifiability; 4 emphasizes timeliness direct materials, direct labor, and manufacturing rather than precision; 5 emphasizes the overhead.
A period cost is a cost that is taken segments of an organization rather than directly to the income statement as an expense summary data concerning the entire in the period in which it is incurred. A merchandising materials, direct labor, and manufacturing company sells finished goods that it has overhead. Because a manufacturing company a.
All rights reserved. A variable cost is a cost that varies, in this section as Finished Goods inventory, in total, in direct proportion to changes in the rather than as Merchandise Inventory. The variable cost per unit is constant. A fixed cost is fixed in total, but the The schedule of cost of goods average cost per unit changes with the level of manufactured lists the manufacturing costs that activity.
These costs are organized under the three categories A differential cost is a cost that differs of direct materials, direct labor, and between alternatives in a decision.A boundary is drawn around each organization. This means personal assets and expenses are not part of the company. Record revenue when a service is provided to the customer, whether or not you collect the money due at that moment.
Accountants identify and measure all expenses incurred during the period and match the expenses against revenues earned. Not overstating assets, owner's equity, and revenues, and not understating liabilities and expenses.
Only using GAAP accounting for things that are significant to the company's financial statements. Forgot your password? Speak now. Accounting Principles And Concepts. Please take the quiz to rate it. All questions 5 questions 6 questions 7 questions 8 questions 9 questions 10 questions 11 questions 12 questions 13 questions.
Feedback During the Quiz End of Quiz. Play as Quiz Flashcard. Title of New Duplicated Quiz:. Duplicate Quiz Cancel. A quiz on basic accounting principles and concepts. More Accounting Principle Quizzes. Accounting, Test 1. Fundamentals Of Accounting Test Quiz! Managerial Accounting. Featured Quizzes. Are You Liberal or Conservative? Related Topics. Questions and Answers. Remove Excerpt. Removing question excerpt is a premium feature. What is the entity concept? You only use GAAP for things that really make a difference or are significant to the company.
Assume the business will continue to operate for the foreseeable future. You stick with the same accounting principles and approach from one period to the next. You must report enough information for insiders to make an informed decision about the company.
Which concept states that "You have to report accounting info at regular intervals? Which principle states that one must "report enough information for outsiders to make informed decisions about the company? You record revenue when you have provided your goods and services, whether you collect money at that moment or not.
Assuming that a business will continue to operate for the foreseeable future. Reporting numbers without having to reflect the calculation of inflation is which of the following concepts? This concept means not overstating assets, owner's equity, and revenues, and not understating liabilities and expenses.
The materiality concept is:. Reporting enough information for insiders to make an informed decision about the company. In what principle states that one must base accounting records and statements on the most accurate data available?You have reached 0 of 0 points, 0. Awesome your answer is correct. Your answer is incorrect. The John Marketing Company provides advertising services to an investment company in year A but receives advertising fee in year B.
The John Marketing Company recognizes this revenue in year A. This action of John Marketing Company is justified by:.Chapter 2 Quiz - Managerial Accounting - CMA Exam
Which accounting concept or principle states that the transactions of a business must be recorded separately from those of its owners or other businesses? Which of the following states that a transaction is not recorded in the books of accounts unless it is measurable in terms of money? Which one of the following states that the life of a business can be divided into equal time periods? The revenue is not recognized until it is earned and realized or at least realizable.
The auditor noticed that the financial statements of Meta Company were missing some footnotes important for users for decision making. This action of the management is a violation of:. This action is related to:. The Modern Enterprises reported all assets in the balance sheet at current market value.
This action is a violation of:. Really interesting especially after you have revised a chapter. Thank you very much To whom it may concern. I found it a good way of getting my self upto date. I am trying to update my self and preparing myself for further studies.
Skip to content Menu. Time limit: 0. Quiz-summary 0 of 16 questions completed Questions: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 You have already completed the quiz before. Hence you can not start it again. You must sign in or sign up to start the quiz. You have to finish following quiz, to start this quiz:. Answered Review. Question 1 of According to accrual concept of accounting, financial or business transaction is recorded:.