A 'Cost Centre' is: MCQ with Answer and Explanation

A 'Cost Centre' is:
A. A method of pricing
B. A location, person, or item of equipment for which costs are accumulated
C. A unit of product
D. A sales territory
Answer: Option B
Solution (By JKSSB Mock Tests)
Cost centre is a segment of the organization where costs are collected, e.g., department, machine.

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Practice More Accountancy and Book Keeping Questions

Question #1
Under the Income Tax Act, the deduction under Section 80IAC is available for eligible startups. What is the maximum period for which this deduction can be claimed?
A. 10 consecutive years from the year of incorporation
B. 3 consecutive years out of the first 10 years
C. 5 consecutive years out of the first 10 years
D. 3 consecutive years out of the first 5 years

Correct Answer: Option B


Explanation:
Section 80IAC allows an eligible startup to claim a 100% deduction of profits for 3 consecutive assessment years out of the first 10 years from the year of incorporation.

Question #2
Which account acts as a 'contra' account to Gross Debtors in the Balance Sheet?
A. Sales Return Account
B. Bad Debts Account
C. Discount Allowed Account
D. Provision for Doubtful Debts Account

Correct Answer: Option D


Explanation:
Provision for doubtful debts has a credit balance and is deducted from the debit balance of Debtors, acting as a contra-asset.

Question #3
What is the rule of Double Entry for Real Accounts?
A. Debit the receiver, Credit the giver
B. Debit all expenses, Credit all incomes
C. Debit the increase, Credit the decrease
D. Debit what comes in, Credit what goes out

Correct Answer: Option D


Explanation:
Real accounts relate to tangible or intangible assets. The golden rule is 'Debit what comes in, Credit what goes out'.