In a manufacturing account, 'Prime Cost' includes: MCQ with Answer and Explanation

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In a manufacturing account, 'Prime Cost' includes:

A. Administration overheads

B. All factory overheads

C. Direct materials, direct labour, direct expenses

D. Selling overheads

Answer: Option C

Solution (By JKSSB Mock Tests)

Prime cost is the sum of all direct costs.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

The balance of the Cash Book represents:

A. Cash at bank only

B. Cash in hand and cash at bank

C. Cash in hand only

D. Cash in hand, cash at bank, and petty cash

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Correct Answer: Option B

Explanation:
A standard triple-column cash book records both cash in hand and cash at bank transactions, so its balance represents both.

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

Question #2

S1: Under GST, e-invoicing is mandatory for businesses with an aggregate turnover exceeding ₹5 Crores. S2: E-invoicing applies to B2C (Business to Consumer) supplies. Which statement(s) is/are correct?

A. S1 only

B. S2 only

C. Neither S1 nor S2

D. Both S1 and S2

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Correct Answer: Option A

Explanation:
S1 is correct as the limit was reduced to ₹5 Crores. S2 is incorrect because e-invoicing is applicable only to B2B supplies and export of goods/services, not B2C supplies.

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Question #3

A Trial Balance will not disclose which error?

A. Error of casting

B. Omission to post one side of an entry

C. Compensating errors

D. Wrong totaling of subsidiary book

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Correct Answer: Option C

Explanation:
Compensating errors cancel each other's effect on trial balance totals, so the trial balance still agrees. Errors of casting, posting one side, wrong totaling will cause disagreement.

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