Question

Which of the following is an example of an Accounting Cost?

• A. Interest paid to Bank on short-term loan taken
• B. Cost incurred on the purchase of raw materials
• C. Wages paid to Labourers
• D. All the above

Answer 1

The correct option is D All the above

$\Rightarrow$ Accounting cost is the recorded cost of an activity. An accounting cost is recorded in the ledgers of a business, so the cost appears in an entity's financial statements.

$\Rightarrow$ It includes methods for recognizing, classifying, allocating, aggregating and reporting such costs and comparing them with standard costs.

$\Rightarrow$ Cost accounting information is also commonly used in financial accounting, but its primary function is for use by managers to facilitate their decision-making.

$\therefore$ Interest paid to Bank on short-term loan taken, Cost incurred on the purchase of raw materials, and Wages paid to Laborers are examples of Accounting cost.