Cost Accounting BasicsMCQQuestion 5817 of 6
All Questions

What is the purpose of a cost accounting system?

Options

ATo prepare financial statements for external parties
BTo provide cost information for management decision-making
CTo track and record revenues
DTo prepare tax returns
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Correct Answer

✅ Option B — To provide cost information for management decision-making

All Options:

  • ATo prepare financial statements for external parties
  • BTo provide cost information for management decision-making ✓
  • CTo track and record revenues
  • DTo prepare tax returns

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Detailed Solution & Explanation

A cost accounting system is designed to collect, analyze, and report information about the costs associated with producing goods or services. Its primary purpose is to provide managers with accurate and timely cost information to help them make informed decisions about production, pricing, and other business activities.
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More Questions from Cost Accounting Basics

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What are the different types of costs that a business organization may incur? Explain the characteristics of each type of cost and provide examples.

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