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

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A 'Standard Cost' is:

A. Historical cost

B. A predetermined cost based on technical estimates

C. Actual cost incurred

D. Average cost

Answer: Option B

Solution (By JKSSB Mock Tests)

Standard cost is a scientifically predetermined cost used as a benchmark for performance evaluation.

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

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Question #1

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Contingent liability is shown in the balance sheet:

A. As a footnote

B. As an asset

C. Under current liabilities

D. Under provisions

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Correct Answer: Option A

Explanation:
Contingent liabilities are disclosed by way of notes to accounts, not as a liability in the balance sheet.

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

Question #2

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In which book, credit purchase of machinery is recorded?

A. Sales book

B. Journal Proper

C. Purchase book

D. Cash book

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Correct Answer: Option B

Explanation:
Purchase book is for credit purchases of goods. Machinery is an asset, so credit purchase is recorded in Journal Proper.

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

Question #3

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In the preparation of Income and Expenditure Account, outstanding expenses at the end are:

A. Added to the respective expense

B. Ignored

C. Deducted from the respective expense

D. Shown as income

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Correct Answer: Option A

Explanation:
Outstanding expenses increase the total expense for the period.

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

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