CHSE COST ACCOUNTS PREVIOUS 10 YEAR QUESTION PAPER

Chse cost accounting previous 5 year question papers

2020: (exam not conducted due to covid-19)

2019 to 2012: Click here

Key Notes:

Cost Accounting is the process of accounting for costs. It begins with the recording of expenditure determined and controlled. Thus, cost accounting is the process ofrecording classifying, analysising

Thus, cost accounting is the formal accounting mechanism by means of which cost of products statement of cost and revenue data for ascertaining and controlling costs.

Cost Accounting Process: The basic steps

Step 1: Collecting and recording of cost data.

Step 2: Classification of costs according to specific objective.

Step 3: Preparation of periodical statements and reports for ascertaining and controlling costs sheets.

Step 4: Presentation of Analytical Reports relating to cost, revenue, profitability and variance etc.

management for appropriate decisions.

Costing

The term 'Costing' has been defined as follows "The technique and process of ascertaining Cost"- C.I.M.A., London

"The process of classifying, recording and appropriate allocation of costs, for the determination of the cost of products or services, and for presentation of suitably arranged data for he purpose of control and guidan:of the management

- Wheldon

The technique in costing consists of body of principles and rules for ascertaining the costs of a product a service.

The process of costing is the day to day routine of ascertaining cost.Thus,Costing

Ascertainment of costs of a product or service by using Techniques principles Day to day process routine practice and rules techniques to the science, arts and practice of cost control and ascertainment of Profitability.statements and reports for the purpose of managerial decision making.

(ii) Cost accountancy is the science, Arts and Practice of Cost Accountants

Thus

COST ACCOUNTANCY

Ability and skill of using

cost accounting principles Science

Possession of systematic body of

knowledge in the field

of cost accounting

Practice

Continuous service

with upto date

knowledge

Cost Accountants

1.3. Features of Cost Accounting

Cost Accounting is a process of accounting for costs.

It records expenditure and incomes relating to production and distribution of goods and services.

It is concerned mainly with cost ascertainment and cost control through application of various methods

and techniques.

4. It involves preparation and presentation of periodical statements and reports for managerial decision

making

5. It provides statistical data on the basis of which future estimates can be prepared.

6. It establishes standards on the basis of which actual costs can be compared to find out variances.

1.4 Nature of Cost Accounting

(0) Cost Accounting is a branch of spealised knowledge in the field of accounting.

Management

Accounting (MA)

Financial Accounting

Cost Accounting (CA)

FA, CA, MA Tree

of Accounting

(ii) Cost Accounting is an inexact science as it is based systematic knowledge.

(ii) Cost Accounting is an art in the sense that it requires the skill and competencies on the part of the

Cost and Management accountant (CMA) in applying the principles, methods and techniques of

cost Accountancy to various managerial problems.

(iv) Cost Accounting is profession in the field of Accounting.

National Level

(1) The Institute of Chartered Accountants of India (ICAT). (It promotes financial

Accounting accounting. It was established in 1949)

Institutes in India

(2) The Institute of Cost Accountants of India (ICAI) (It promotes cost accounting.

It was established 1959)

1.5 Objectives of Cost Accounting

The main objectives of cost accounting are as follows:

1. To ascertain cost: The primary objective of cost accounting is to ascertain cost of a product, service,

operation or a cost centre. Basically there are two methods of cost ascertainment:

6. Helps in minimising wastages and losses: Cost accounting system enables to locate the losses relating to

materials, idle time and under utilisation of plant and machinery,

7. Facilitates cost comparison: It facilitates cost comparison in respect of jobs, process, departments and

also between two periods. This reveals the efficiency or otherwise of each job, process or department

Assists in increasing profitability: Costing reports provide information about profitable or unprofitable

areas of operation. The management can discontinue that product line or that department which are responsible

for incurring losses and only profitable line of activities alone are retained.

9. Reconciliation with financial accounts: A well maintained cost accounting system facilitates reconciliation

with financial accounts to check the arithmetical accuracy of both the systems,

10. It guides future production policy: Cost data help management in determining future production policy.

Any expansion or contraction of production for the future is based on past cost data.

B: Advantages to Employees

1. Cost accounting system enables employees to earn better wages through overtime wages and incentive

systems of wage payment.

2. By providing better facilities it ensures job security to employees.

3. Employees benefit by merit rating techniques which is conducted by scientific process.

C Advantages to Creditors

1. It increases the confidence of creditors in the capital employed in the business.

2. The frequent preparation of reports and statements help in knowing solvency position of the business.

D: Advantages to Government

1. It helps government in formulating policies regarding export, import taxation, price control measures, wage

fixation, etc.

2. It helps in assessing excise duty, sales tax and income tax of the business.

3. Costing information helps in preparing national plans and economic laws.

E: Advantages to Society

1. Cost reduction and cost control programmes help to minimise cost of production of goods and services. A

portion of the reduced cost of production is shared by customers by paying less price for goods and services.

2. It offers yment opportunities in the cost accounting department in the capacity of Cost Accountants

and manageemnt.

1.9 Limitations of Cost Accounting

The main limitations of Cost Accounting are as follows:

1. Not an exact science and Lack of Accuracy: Cost Accounting is not an exact science. The principles and

practices of cost accounting are changing from time to time. The accuracy of cost accounts get deserted

owing to the use of notional cost such as standard cost estimated cost, etc. So lack of accuracy is a one of

the limitation of cost accounting.

2. It is expensive: The system of cost accounting involves additional expenditure to be incurred in installing

and maintaining it. However, before installing the system of cost accounting, care must be taken to ensure

that the benefits derived is more than the cost of investment made.

3. No Uniform Procedure, method and technique: All business enterprises cannot make use of a single

method and technique of costing. The methods and techniques of cost accounting used by different business

organisations are not uniform and therefore, they provide different results. If a wrong technique and method

is used, it misleads the results of business,

4. Not suitable for small-scale units: A cost accounting system is applicable only to a large-sized business

but not to small-sized one. Hence, there is limitation to its application to all types of business.

5. Based on estimations and conventions: In cost accounting some elements of costs are charged on the

Cost Accounting is the process of accounting for costs. It begins with the recording of expenditure determined and controlled. Thus, cost accounting is the process ofrecording classifying, analysising