CMA Intermediate · Cost Accounting · Introduction to Cost Accounting
Which of the following activities is an objective of cost accounting that is NOT served by financial accounting in its conventional form?
Ascertaining the cost of each product or job for pricing and control is the distinctive objective of cost accounting. Financial accounting prepares balance sheets, records transactions and finds overall profit, but it does not normally give product-wise cost detail.
- APreparing a balance sheet at the year end
- BAscertaining the cost of each product or job to support pricing and controlCorrect
- CRecording all transactions in the journal under double entry
- DDetermining the overall profit or loss of the entity for the year
Explanation
Conventional financial accounting reports the overall results and position of the entity. Product or job-wise cost ascertainment for pricing and control is the distinctive cost accounting objective. The other options are all financial accounting outputs or processes.
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