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All questions of Cost Book keeping for B Com Exam

What is the purpose of a Stores Ledger Control Account?
  • a)
    To calculate interest on savings accounts
  • b)
    To maintain personal accounts
  • c)
    To track all purchases of materials for stores
  • d)
    To reconcile Cost and Financial Accounts
Correct answer is option 'C'. Can you explain this answer?

Nitya Mehta answered
The purpose of a Stores Ledger Control Account is to track all purchases of materials for stores. It serves as a summary account that records the movement of inventory in and out of the stores, providing an overview of the transactions related to the purchase of materials.

The Stores Ledger Control Account is an important component of the accounting system for managing and controlling inventory. It allows businesses to monitor the flow of materials in their stores, ensuring that accurate records are maintained and discrepancies can be identified and resolved.

Key Functions:

1. Tracking Purchases: The Stores Ledger Control Account keeps a record of all purchases made for the stores. This includes the quantity, cost, and other relevant details of the materials acquired. By maintaining an accurate record of purchases, businesses can ensure that they have the necessary inventory to support their operations.

2. Monitoring Inventory Levels: The Stores Ledger Control Account helps businesses monitor their inventory levels. By recording the inflow and outflow of materials, it provides valuable information about the availability of stock. This allows businesses to identify when additional materials need to be purchased or when excess inventory needs to be reduced.

3. Controlling Costs: The Stores Ledger Control Account helps in controlling costs by providing information about the expenditure on materials. By tracking the cost of purchases, businesses can analyze their spending patterns and identify areas where cost-saving measures can be implemented.

4. Reconciliation: The Stores Ledger Control Account plays a crucial role in reconciling the Cost and Financial Accounts. It ensures that the inventory value recorded in the financial accounts matches the actual stock held in stores. Any discrepancies can be investigated and resolved to ensure accurate financial reporting.

Overall, the Stores Ledger Control Account is an essential tool for managing inventory and controlling costs. It provides businesses with a centralized record of purchases for stores, allowing them to monitor inventory levels, track costs, and ensure accurate financial reporting.
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What is the main advantage of reconciling financial accounts regularly?
  • a)
    To increase interest on savings accounts
  • b)
    To simplify financial transactions
  • c)
    To identify errors and unauthorized charges
  • d)
    To reduce overdraft fees
Correct answer is option 'C'. Can you explain this answer?

Dev Patel answered
The main advantage of reconciling financial accounts regularly is to identify errors and unauthorized charges. It helps in maintaining accurate records and preventing financial losses due to fraudulent activity or mistakes in transactions.

Which ledger contains the cost of materials, wages, and overheads for each job undertaken?
  • a)
    Stores Ledger
  • b)
    Work-in-Progress Ledger
  • c)
    Finished Goods Ledger
  • d)
    Cost Ledger
Correct answer is option 'B'. Can you explain this answer?

Dev Patel answered
The Work-in-Progress Ledger contains the cost of materials, wages, and overheads for each job undertaken. It helps in tracking the cost of work in progress and specific jobs or processes.

Which account is necessary to make the Cost Ledger self-balancing in a non-integrated accounting system?
  • a)
    Stores Ledger Control A/c
  • b)
    Work-in-Progress Ledger Control A/c
  • c)
    General Ledger Adjustment (Control) A/c
  • d)
    Finished Goods Ledger Control A/c
Correct answer is option 'C'. Can you explain this answer?

Dev Patel answered
The General Ledger Adjustment (Control) Account is necessary to make the Cost Ledger self-balancing in a non-integrated accounting system. It ensures that all transactions originating in the Financial Accounts are eventually transferred to Cost Accounts.

Which ledger consists of all impersonal accounts in a non-integrated accounting system?
  • a)
    Stores Ledger
  • b)
    Work-in-Progress Ledger
  • c)
    Finished Goods Ledger
  • d)
    Cost Ledger
Correct answer is option 'D'. Can you explain this answer?

Dev Patel answered
In a non-integrated accounting system, the Cost Ledger consists of all impersonal accounts. It includes accounts related to cost elements and is made self-balancing through control accounts.

What is the purpose of a General Ledger Adjustment (Control) Account in Cost Accounting?
  • a)
    To maintain personal accounts
  • b)
    To simplify financial transactions
  • c)
    To make the Cost Ledger self-balancing
  • d)
    To calculate interest on savings accounts
Correct answer is option 'C'. Can you explain this answer?

Dev Patel answered
The purpose of a General Ledger Adjustment (Control) Account in Cost Accounting is to make the Cost Ledger self-balancing. It helps in reconciling Cost and Financial Accounts and ensures that the Cost Ledger remains in agreement with the Financial Accounts.

Why is it important to reconcile accounts regularly?
  • a)
    To increase overdraft fees
  • b)
    To identify errors and unauthorized charges
  • c)
    To reduce interest on savings accounts
  • d)
    To simplify financial transactions
Correct answer is option 'B'. Can you explain this answer?

Dev Patel answered
Reconciling accounts regularly is important to identify errors, unauthorized charges, and fraudulent activity in your financial transactions. It helps in ensuring the accuracy of your records and avoiding financial losses.

What is the purpose of a Finished Goods Ledger Control Account?
  • a)
    To calculate interest on savings accounts
  • b)
    To maintain personal accounts
  • c)
    To track the total value of finished goods in stock
  • d)
    To reconcile Cost and Financial Accounts
Correct answer is option 'C'. Can you explain this answer?

Dev Patel answered
The purpose of a Finished Goods Ledger Control Account is to track the total value of finished goods in stock. It helps in monitoring the value of completed products and facilitates the reconciliation of Cost and Financial Accounts.

What is the primary purpose of reconciling financial accounts?
  • a)
    To identify unauthorized transactions
  • b)
    To calculate interest on savings accounts
  • c)
    To avoid overdraft fees
  • d)
    To increase credit card limits
Correct answer is option 'C'. Can you explain this answer?

Dev Patel answered
The primary purpose of reconciling financial accounts is to avoid overdraft fees and ensure that your account records match the statements provided by financial institutions. It also helps in identifying unauthorized transactions and errors in your accounts.

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