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Cost Accounting Basics Quiz

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Questions and Answers

What is the definition of cost accounting according to the C.I.M.A. London terminology?

The establishment of budgets, standard costs and actual costs of operations, processes, activities or products, and the analysis of variances, profitability or the social use of funds (correct)

The presentation of information derived from cost accounting for managerial decision making

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

The classification, accumulation, assignment and control of costs

How does Wheldon define cost accounting?

The establishment of budgets, standard costs and actual costs of operations, processes, activities or products, and the analysis of variances, profitability or the social use of funds

The presentation of information derived from cost accounting for managerial decision making

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

Classifying, recording and appropriate allocation of expenditure for determination of costs of products or services and for the presentation of suitably arranged data for purposes of control and guidance of management (correct)

What is the difference between cost accounting and costing?

Cost accounting is concerned with managerial decision making derived from information presented by cost accountancy

Cost accounting provides only the basis and information for ascertainment of costs, while costing can be carried out arithmetically by means of memorandum statements or by the method of integral accounting (correct)

Cost accounting is about analyzing variances and profitability, while costing is about allocating expenditure for determination of costs

Cost accounting involves classification, accumulation, assignment and control of costs, while costing focuses on establishing budgets, standard costs and actual costs

What is cost accountancy according to its definition?

<p>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</p> Signup and view all the answers

What does cost accounting involve?

<p>"Classification, accumulation, assignment and control of costs"</p> Signup and view all the answers

Study Notes

Definition of Cost Accounting

Cost accounting is defined by the C.I.M.A. London terminology as "the establishment of budgets, standard costs, and actual costs of operations, processes, activities, or products".

Wheldon's Definition of Cost Accounting

Wheldon defines cost accounting as "the process of accounting for cost from the point of view of the management".

Cost Accounting vs. Costing

Cost accounting is concerned with the ascertainment of costs, whereas costing is concerned with the fixation of costs.
Costing is a technique used in cost accounting to determine the cost of a product or service.

Definition of Cost Accountancy

Cost accountancy is the application of cost accounting principles and techniques to guide management decisions.

What Cost Accounting Involves

Cost accounting involves the classification, recording, and reporting of costs to provide a basis for managerial decision-making.
It involves the establishment of budgets, standard costs, and actual costs of operations, processes, activities, or products.
Cost accounting provides a framework for the evaluation of performance and the identification of areas for improvement.

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Description

Test your knowledge of cost accounting with this quiz covering the classification, accumulation, assignment, and control of costs, as well as budgeting, standard costs, variances analysis, and profitability.