COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The accounting method must have a mapping set to convert the accounts.
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Accounting rules cannot override the accounting method.
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Any secondary ledger that uses the method cannot have a COA.
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The accounting method may only be used by ledgers without a COA.
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The accounting method can be assigned to any ledger.
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Detailed explanation-1: -If the accounting method has an assigned chart of accounts, it may only be used by ledgers that use the same chart of accounts. If the accounting method doesn’t have an assigned chart of accounts, the accounting method can be assigned to any ledger.
Detailed explanation-2: -There are two types of accounting to choose from: single-entry and double-entry accounting. And, there are three accounting methods: accrual basis, cash basis, and modified cash basis.
Detailed explanation-3: -A primary ledger is the main record-keeping ledger. Like any other ledger, a primary ledger records transactional balances by using a chart of accounts with a consistent calendar and currency, and accounting rules implemented in an accounting method.
Detailed explanation-4: -The three types of accounting methods are cash-basis accounting, accrual accounting and modified cash-basis accounting. Cash-basis accounting records income when received and transactions when paid.
Detailed explanation-5: -The three components of accounting systems are identification, measurement and communication. The three basic elements of all accounting systems support a standardized framework for recording and conveying information.