COST ACCOUNTING
COST BOOK KEEPING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Depreciation of equipment
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Distribution expenses
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Factory manager’s salary
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Notional rent
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Detailed explanation-1: -which of the following may be included in the cost account but would be exlcluded in financial account ? d. notional rent. Correct answer is mentioned ‘d’ option.
Detailed explanation-2: -expenses are excluded from cost.
Detailed explanation-3: -Answer :-Direct labour, direct expenses, indirect material, indirect labour, indirect expenses. 2.
Detailed explanation-4: -In such situation if management wants to compare its production cost with the production cost of the competitors then it must include “market rent” of this land in the product. As management is not actually paying any rent therefore, any amount included in the production cost towards imaginary rent is notional cost.
Detailed explanation-5: -There are certain items which are included in financial accounts but find no place in cost accounts. These may be items of income or expenditure or appropriation of profit: (A) PURELY FINANCIAL CHARGES: (i) Loss on sale of fixed assets/ investments.