In 'Reconciliation of Cost and Financial Accounts', which item is added to financial profit to arrive at costing profit?
A. Under-absorption of overheads in cost accounts
B. Dividend received recorded in financial accounts
C. Notional interest credited in cost accounts
D. Depreciation overcharged in cost accounts
Answer: Option C
Solution (By JKSSB Mock Tests)
Notional expenses (like interest on own capital) appear in cost accounts but not in financial accounts. So if costing profit is lower, we add it back to financial profit to reconcile.
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