Cost Accounting Basics Quiz
Accounting information is important for every business which will serve the needs of variety of interested parties. To satisfy the needs of all interested parties a sound accounting system is very necessary. Accounting may be divided into three parts i. financial accounting ii. cost accounting iii.management accounting.
Financial accounting is mostly concerned to record the business transactions in books of accounts so that final accounts can be prepared. Cost accounting is developed to help the internal management in decision making. The information provided by cost accounting acts as a managerial tool so that business can utilise the available
resources at optimum level.
Cost is the amount of resource given up in exchange for some goods or services. The resources given up are money or money’s equivalent expressed in monetary units. The Chartered Institute of Management Accountants, London defines cost as “the amount of expenditure (actual or notional) incurred on, or attributable to a specified thing or activity”.
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