Cost Accounting defines 'Cost Centre' as: MCQ with Answer and Explanation

Cost Accounting defines 'Cost Centre' as:

A. A person, location, or item of equipment for which costs may be ascertained for control

B. A unit of product ready for sale

C. The bank account where funds are kept

D. The total profit of the organization

Answer: Option A

Solution (By JKExamLibrary)

A cost centre is a logical segment (like a department or machine) used to accumulate and trace costs for management purposes.

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

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A: Input Tax Credit (ITC) allows a business to reduce the tax it has already paid on inputs. R: ITC prevents the cascading effect of taxes (tax on tax). Choose the correct option.

A. Both A and R are true and R is the correct explanation of A

B. Both A and R are true but R is NOT the correct explanation of A

C. A is false but R is true

D. A is true but R is false

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Correct Answer: Option A

Explanation:
ITC allows businesses to claim credit for taxes paid on purchases against their output tax liability. This ensures tax is only levied on the value added at each stage, eliminating the cascading effect. R correctly explains the purpose of ITC.

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Correct Answer: Option C

Explanation:
The auditor's responsibility for subsequent events covers the period up to the date of auditor's report.

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

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Correct Answer: Option A

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