An overview of cost and management accounting- II
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of management accounting?
The primary objective of management accounting is to provide financial and non-financial information to internal management to aid in planning, decision-making, and control of business operations.
What is 'transfer pricing' in the context of management accounting?
Price charged when one department sells goods to another internally.
How does cost accounting differ from financial accounting?
Cost accounting focuses on recording, classifying, and analysing costs to aid internal management decisions, while financial accounting records all financial transactions to prepare statutory financial statements for external stakeholders.
What is 'opportunity cost' in cost accounting?
Benefit foregone by choosing one alternative over another.
What is meant by the term 'cost centre' in management accounting?
A cost centre is a department, function, or unit within an organisation to which costs can be specifically allocated for the purpose of cost control and responsibility accounting.
What is 'sunk cost' in management accounting?
A past cost that cannot be recovered or changed by future decisions.
What is a 'profit centre' in the context of management accounting?
A profit centre is a segment of a business that is responsible for generating both revenues and costs, and its performance is measured by the profit or loss it produces.
What is 'differential cost' in cost analysis?
The difference in total cost between two alternative courses of action.
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