Which of the following is a 'period cost'? MCQ with Answer and Explanation

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Which of the following is a 'period cost'?

A. Rent of office building

B. Royalty on production

C. Direct material

D. Direct labour

Answer: Option A

Solution (By JKSSB Mock Tests)

Period costs are not tied to production volume and are expensed in the period incurred. Office rent is a period cost.

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

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Question #1

The 'Convergence' of accounting standards means:

A. No change

B. Keeping different standards

C. Adopting IFRS as they are

D. Modifying local standards to align with IFRS

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Correct Answer: Option D

Explanation:
Convergence involves making domestic standards consistent with IFRS, with modifications if necessary.

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Question #2

Which of the following is not a financial statement?

A. Balance Sheet

B. Profit & Loss Account

C. Trial Balance

D. Cash Flow Statement

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Correct Answer: Option C

Explanation:
Trial balance is a working paper, not a financial statement.

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Question #3

An item of 'Outstanding Income' is shown in Balance Sheet as:

A. Asset

B. Expense

C. Income

D. Liability

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Correct Answer: Option A

Explanation:
Outstanding income is receivable, hence a current asset.

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

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