Cost Accounting Definition and Principles

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LavishTennessine
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Cost accounting involves documenting, consolidating, evaluating, and elucidating the intricate particulars pertaining to the expenses incurred in relation to supplies, labor, and overheads for the production of goods or services.

True

Cost accounting is only applicable to manufacturing operations, not service enterprises.

False

Cost accounting primarily focuses on meeting the legal obligations associated with providing reports to shareholders, creditors, governmental entities, and other external stakeholders.

False

Cost accounting aims to achieve a high level of accuracy in determining the total cost without revealing the specific components that make up this total cost.

False

Cost accounting involves the systematic process of categorizing and disclosing all cost-related facets of an organization's operational efficacy within a specified timeframe.

True

Cost accounting involves the classification, recording, and allocation of income in a suitable manner.

False

The primary purpose of cost accounting is to provide external stakeholders with relevant financial information.

False

Cost accounting primarily focuses on the management of fixed expenses only.

False

The outcomes of cost accounting analysis are not utilized by corporate decision-makers to ascertain the items and services that yield the most profitability.

False

Cost accounting refers to the systematic procedure of monitoring, evaluating, and consolidating fixed expenses only.

False

Cost accounting systems are exclusively used for internal purposes within a company entity.

True

The primary objective of a cost accounting system is to aggregate and record all expenses associated with the production of a product.

True

Cost accounting systems do not play a crucial role in influencing the valuation of a corporation and its expansion prospects.

False

The implementation of cost accounting systems does not facilitate the systematic arrangement of production processes within an organization.

False

Cost accounting systems are not applicable to service enterprises, only to manufacturing operations.

False

The Cost Accounting system helps in identifying unproductive activities, such as wastage of manpower, idle time, and material spoilage.

True

Cost accounting aims to identify the specific factors responsible for the reduction or augmentation of a business's profit or loss.

True

The implementation of a cost audit system within an organization serves to facilitate the provision of accurate and dependable cost information to internal management only.

False

An essential element of a cost system entails the utilization of a perpetual inventory system, which incorporates a mechanism for conducting ongoing stocktaking.

True

The identification of cost centers or responsibility centers within a Cost Accounting system is not crucial in establishing an effective organizational structure.

False

This quiz covers the definition, purpose, and principles of cost accounting, including the documentation and evaluation of expenses related to production and sale of goods or services. It also includes its applicability to manufacturing operations and service enterprises.

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