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2 Marks 1. Accounting:    Accounting is a systematic process of recording, summarizing, analyzing, and reporting financial transactions of a business or entity, enabling informed decision-making.   2. Double Entry System:    It's an accounting method requiring every transaction to have at least two entries (debit and credit), ensuring balance in financial records and maintaining the accounting equation.   3. Error of Commission:    An error made during accounting that involves an incorrect amount, account, or party, affecting the accuracy of financial records due to a wrong entry or commission.   4. Single Entry System:    A basic accounting method that records only one side of transactions, often cash or bank transactions, lacking the structured balance maintained by the double entry system.   5. Trading Account (Trading A/c):    An account summarizing direct costs (purchases, expenses, sa...

  UNIT - V PART A (THEORY) 1. What do you understand by overheads? In business, overhead or overhead expense refers to an ongoing expense of operating a business; it is also known as an "operating expense". Overheads are the expenditure which cannot be conveniently traced to or identified with any particular cost unit. Therefore, overheads cannot be immediately associated with the products or services being offered, thus do not directly generate profits. 2. What is step method? Under this method, service departments are arranged in the descending order of serviceability. The service department which renders service to all or maximum number of the other service departments and productions departments is taken up for distribution. Then the second service cost centre is taken up and this process is repeated till costs of all the services cost centres have been distributed to production departments. This method is also called step method or step ladder method because th...

  UNIT - IV PART - A (THEORY) 1. What do you mean by labour cost? Labour is very important part of production. Its cost is very important in total cost of production. Labour cost means all amount given to labourers or employees for his work for production. In labour cost we include two type cost relating to labour - Monetary cost of labour and Non monetary labour cost. 2. Define idle time. Idle time is unproductive time on the part of employees or machines as a result of factors beyond their control. Idle time is the time associated with waiting, or when a piece of machinery is not being used but could be 3. What is piece rate system? The piece rate system is that system of wage payment in which the workers are paid on the basis of the units of output produced. Piece rate system does not consider the time spent by the workers. Piece rate system is the method of remunerating the workers according to the number of unit produced or job completed. It is also known as paym...

  UNIT-III PART-A (THEORY) 1. What is maximum Stock Level? It is that quantity above which the sock of any item should not be allowed to exceed. Fixation of quantity for maximum stock level depends on rate of consumption required for production, availability of space and cost of storage. 2. Give any two advantages of FIFO method. FIFO method is easy to understand and operate. FIFO method is useful where transactions are not voluminous and prices of materials are falling. 3. What is EOQ? Economic ordering quantity is the re-order quantity, which is the quantity to be purchased cach time an order is placed. It aims at minimising both carrying cost and ordering cost. At EOQ, total cost is minimum. 4. What is material control? Material control is a system which ensures required quantity of material of the required quality at the right time and place with minimum investment of capital. It may be defined as "the regulation of the functions of an organisation relating...

  UNIT - II Cost sheets - Reconciliation of Cost and financial accounts. PART-A (THEORY) 1. Write short note on Job Costing. It is applicable to industry where goods are made against individual orders from customers. It is the form of specific order costing where work is undertaken to customers' specific requirements. 2. What is Cost Sheet? The expenses of a product are analysed under different heads in the form of a statement. This statement is called Cost Sheet. In other words, Cost sheet is a statement showing the total cost under proper classifications in a logical order. 3. What is Prime Cost? This is the first cost of production. This is also called direct cost. It is the aggregate of direct materials, direct labour and direct expenses, which are easily identifiable with the product. 4. What is cost unit? Cost unit is that unit of measurement which is helpful to classify the cost and measure the cost of products and services. Before measuring the cost, we ...

  What are the essentials of a good costing system?   The essential features, that a good Cost Accounting System should possess, are as follows: Cost Accounting System should be tailor-made, practical, simple, and capable of meeting the requirements of a business concern. The data to be used by the Cost Accounting System should be accurate; otherwise, it may distort the output of the system. Necessary cooperation and participation of executives from various departments of the concern is essential for developing a good system of Cost Accounting, The Cost of installing and operating the system should justify the results. The system of costing should not sacrifice the utility by introducing meticulous and unnecessary details. A carefully phased programme should be prepared by using network analysis for the introduction of the system. Management should have a faith in the Costing System and should also provide a helping hand for its development and success. Explain the natur...

Elements of  Cost Accounting  2 Mark Important Question & Answer 1. Define Cost Accounting. I.C.M.A has defined Cost Accounting as follows: "The process for accounting for cost from the point at which expenditure is incurred or committed to the establishment of its ultimate relationship with cost centres and cost units. In its widest usage, it embraces the preparation of statistical data, the application of cost control methods and the ascertainment of the profitability of activities carried out or planned." 2. What is Costing? The system of calculating the cost is called costing. This cost may be actual or estimated. We know that we go to different steps of production when we produce any product. At every stage of production, we need to calculate the cost of raw materials, labor cost and direct and indirect cost. We allocate the different expenses under a system and this system is called costing. 3. What is a Profit Centre? A profit center is a business unit or depart...