Cost and Management Accounting Chapter 1 Quiz

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What is the difference between Cost Accounting, Financial Accounting, and Management Accounting?

Cost Accounting is used for tax purposes, while Financial Accounting is used for budgeting
Cost Accounting is related to human resources, while Management Accounting is related to production processes
Financial Accounting deals with internal decision making, while Management Accounting deals with external reporting
Cost Accounting focuses on historical financial data, while Management Accounting focuses on future-oriented information (correct)

What is the primary objective of Cost and Management Accounting?

To help in decision making and control functions within the organization (correct)
To manage the relationship with suppliers and creditors
To prepare financial statements for external stakeholders
To comply with legal and regulatory requirements

What is the function of the Cost Accounting Department in an organization?

To handle financial transactions with customers
To oversee marketing and sales activities
To manage the human resources department
To analyze, record, and report cost information (correct)

What are the methods used to segregate semi-variable costs into fixed and variable costs?

Regression analysis and high-low method (D) Signup and view all the answers

What is the concept of cost reduction and cost control mainly focused on?

Balancing costs with quality and efficiency considerations (D) Signup and view all the answers

What does the term 'Digital Costing System' refer to?

A system for managing costs using digital technology and automation (A) Signup and view all the answers

What is the main focus of Cost Leadership as described in Porter's theory of Generic Competitive Strategies?

Producing goods or providing services at the lowest cost while maintaining quality (B) Signup and view all the answers

According to CIMA, what is the foundation of the internal financial information system for managers?

An organization's costing system (A) Signup and view all the answers

What does Cost Accounting involve according to the definition provided?

Process of ascertaining costs (D) Signup and view all the answers

How is Cost Accountancy defined?

The application of costing and cost accounting principles, methods and techniques (D) Signup and view all the answers

What is the main objective of Management Accounting according to CIMA Official Terminology?

To create, protect, preserve and increase value for stakeholders (A) Signup and view all the answers

What is the definition of Costing according to CIMA?

The technique and process of ascertaining costs (B) Signup and view all the answers

What is Cost defined as according to the text?

The amount of resource given up in exchange for some goods or services (B) Signup and view all the answers

What is included in the process of Cost Accounting according to the text?

Application of costing and cost accounting principles, methods, and techniques (D) Signup and view all the answers

What is Management Accounting according to CIMA Official Terminology?

The application of accounting and financial management principles to increase value for stakeholders. (C) Signup and view all the answers

What is Cost Accountancy according to the text?

The application of costing and cost accounting principles, methods, and techniques to control an organization's costs. (A) Signup and view all the answers

Objective of Cost and Management Accounting

The primary objective of Cost and Management Accounting is to help in decision making and control functions within the organization by providing relevant financial data.

Cost Accounting vs. Management Accounting

Cost Accounting focuses on recording and analyzing historical cost data, while Management Accounting focuses on providing future-oriented information for decision-making.

Function of Cost Accounting Department

The Cost Accounting Department analyzes, records, and reports cost information to help businesses understand and control their expenses.

Methods for Segregating Costs

Regression analysis and the high-low method are used to separate semi-variable costs into their fixed and variable components. These methods help businesses understand how costs change with production levels.