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

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A 'Standard Cost' is:

A. Average cost

B. Actual cost incurred

C. A predetermined cost based on technical estimates

D. Historical cost

Answer: Option C

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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Which of the following is an 'Accounting Estimate'?

A. Revenue recognition policy

B. Useful life of an asset

C. Depreciation method

D. Inventory valuation method

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Correct Answer: Option B

Explanation:
Useful life is an estimate; depreciation method is an accounting policy.

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Question #2

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The 'Consolidation Procedure' under AS 21 requires:

A. Ignoring subsidiary's data

B. Line by line adding of like items of assets, liabilities, income, expenses

C. Only adding assets

D. Only adding profits

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Correct Answer: Option B

Explanation:
Consolidation combines similar items and eliminates intra-group transactions.

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Question #3

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In a partnership firm, a partner's current account is maintained to record:

A. Drawings, interest on capital, salary, share of profit, etc.

B. Only capital contributions

C. Only profits

D. Only loans to partners

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Correct Answer: Option A

Explanation:
Fixed capital method keeps capital account for initial capital and current account for all other adjustments.

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