JAIIB · AFM

AN OVERVIEW OF COST & MANAGEMENT ACCOUNTING-I

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.

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Q

What is the primary objective of Cost Accounting?

A

The primary objective of Cost Accounting is to ascertain the cost of products or services, help in cost control, and assist management in decision-making by providing detailed cost information.

Q

What is the scope of Management Accounting in decision-making?

A

It provides financial data to aid managerial decisions

Q

How does Management Accounting differ from Financial Accounting?

A

Management Accounting is forward-looking and intended for internal management use, focusing on planning and control, whereas Financial Accounting is historical and prepared for external stakeholders following statutory requirements.

Q

What is the meaning of Cost Accounting in banking?

A

Recording and analyzing costs to improve bank efficiency

Q

What is meant by 'Cost' in the context of Cost Accounting?

A

Cost is the monetary value of resources sacrificed or foregone to achieve a specific objective, such as producing a product or rendering a service.

Q

What is the difference between Cost Accounting and Management Accounting?

A

Cost Accounting records costs; Management Accounting aids planning

Q

What is a Cost Centre?

A

A Cost Centre is a location, person, or item of equipment for which costs may be ascertained and used for the purpose of cost control; it is the smallest segment of activity for which costs are collected.

Q

What is an Overhead Cost?

A

Indirect cost not directly traceable to a product or service

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