A costing technique where only variable costs are charged to products, and fixed costs are written off to the P&L account in the period incurred, is: MCQ with Answer and Explanation

Question

A costing technique where only variable costs are charged to products, and fixed costs are written off to the P&L account in the period incurred, is:

A. Marginal Costing

B. Standard Costing

C. Absorption Costing

D. Job Costing

Answer: Option A

Solution (By JKSSB Mock Tests)

Marginal costing strictly separates fixed and variable costs, treating fixed costs as period costs rather than product costs.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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'Substance over Form' is a concept that means:

A. Transactions should be accounted for based on their legal form

B. Form is more important

C. Legal form prevails

D. Transactions should be accounted for according to their economic reality

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Correct Answer: Option D

Explanation:
Substance over form emphasizes economic substance rather than merely legal form.

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Question #2

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A 'Rectifying Entry' is passed to:

A. Adjust depreciation

B. Close the books

C. Record opening entries

D. Correct errors in accounts

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Correct Answer: Option D

Explanation:
Rectifying entries correct errors found after posting.

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Question #3

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Zero Base Budgeting requires:

A. Justification of every budget item from scratch

B. Only incremental changes

C. No justification

D. Using last year's budget as base

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Correct Answer: Option A

Explanation:
ZBB starts from a 'zero base', and every function and expenditure must be justified.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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