Which of the following is NOT a component of the cost of production?
A. Office and administration overheads
B. Selling and distribution overheads
C. Factory overheads
D. Direct materials
Answer: Option B
Solution (By JKSSB Mock Tests)
Cost of production includes prime cost, factory overheads, and office/admin overheads. Selling and distribution overheads are added to arrive at the Cost of Sales, not Cost of Production.
S1: AS 1 mandates the disclosure of all accounting policies used. S2: AS 3 deals with the preparation of cash flow statements. Which statement(s) is/are correct?
Explanation:
AS 1 requires the disclosure of significant accounting policies. AS 3 mandates the preparation and presentation of cash flow statements. Both statements are correct.
S1: Cost audit is mandatory for all companies in India. S2: Cost audit is conducted to verify the accuracy of cost records. Which statement(s) is/are correct?
Explanation:
Cost audit is not mandatory for all companies; it is only required for specific classes of companies (like those in regulated sectors or manufacturing) as prescribed by the Central Government. S2 is correct as it verifies cost records. S1 is incorrect.
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