Skip to content

CA Intermediate · Cost and Management Accounting · Cost Accounting Systems

Under a non-integrated (separate ledgers) system of accounting, which of the following is recorded only in the cost books and NOT in the financial books?

Notional rent on owned premises is recorded only in the cost books. It is an imputed cost included for cost comparison and pricing, but no actual payment is made, so the financial books do not record it, while wages, interest and sales are actual transactions.

  1. ANotional rent on owned premises charged to jobsCorrect
  2. BWages paid to factory workers
  3. CInterest paid on a bank loan
  4. DSales revenue from customers

Explanation

Notional rent on owned premises is a cost-only item. It is included in cost to ascertain true cost but no cash or liability arises, so it does not appear in the financial books. Wages, loan interest and sales are real transactions recorded in the financial books.

Did you get it right without looking?

One question tells you little. A timed set on Cost Accounting Systems shows your real accuracy, how long you take and where you lose marks.

Practise Cost Accounting SystemsFree diagnostic mock

More Cost Accounting Systems questions