In cost accounting, prime cost is: MCQ with Answer and Explanation

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In cost accounting, prime cost is:

A. Direct material + Direct labour + Direct expenses

B. Administration overheads

C. All manufacturing costs

D. Direct material + Direct labour + Factory overheads

Answer: Option A

Solution (By JKSSB Mock Tests)

Prime cost is the sum of all direct costs: direct material, direct labour, and direct expenses.

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 'Fraud' in an audit context refers to:

A. Intentional act by one or more individuals among management, those charged with governance, employees, or third parties involving deception to obtain an unjust or illegal advantage

B. Unintentional misstatement

C. Any error

D. Negligence

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Correct Answer: Option A

Explanation:
Fraud is intentional; error is unintentional.

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

Question #2

The 'Deduction under Section 80C' is available up to maximum of:

A. ₹1,50,000

B. ₹2,00,000

C. ₹1,00,000

D. ₹50,000

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Correct Answer: Option A

Explanation:
Under Section 80C, maximum deduction is ₹1,50,000.

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

Question #3

In the context of taxation, the term 'PAN' stands for:

A. Public Account Number

B. Permanent Account Number

C. Personal Account Number

D. Primary Account Number

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Correct Answer: Option B

Explanation:
PAN stands for Permanent Account Number, a unique 10-character alphanumeric identifier issued by the Income Tax Department of India.

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

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