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CMA Intermediate · Cost Accounting · Cost Accounting Standards (CAS 1 to CAS 24)

CAS 24 (Treatment of Revenue in Cost Statements) deals with which of the following in cost statements?

CAS 24 deals with the treatment of revenue, such as sales and other income, in cost statements. Allocation of administrative overheads and employee cost classification fall under other standards, so the first option is the only one that matches the scope of CAS 24.

  1. ATreatment of sales and other revenue items in cost statementsCorrect
  2. BValuation of finished goods stock only
  3. CAllocation of administrative overheads to cost objects
  4. DClassification of employee costs into direct and indirect

Explanation

CAS 24 prescribes the principles and methods of classifying, measuring and assigning revenue items (such as sales, scrap and other income) in cost statements. Administrative overheads are covered by CAS 11, and employee cost by CAS 7, so the other options point to different standards.

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