(iii) On the basis of "Relationship with accounting period" costs are classified as
(A) Historical Costs and Pre-determined Costs.
(B) Capital Costs and Commercial Costs.
(C) Capital Costs and Revenue Costs.
(D) Product Costs and Period Costs.
Answers
Answer:
(A) Historical costs and Pre-determined costs.
Explanation:
On the basis of "Relationship with accounting period", they can be classified into the historical and pre-determined costs.
I) Historical Costs: As the name mean it is figured after they are brought about. These expenses are determined simply after the generation of a specific thing is finished.
ii) Pre-determined Costs: These expenses are registered ahead of time of creation based on a particular of all elements affecting the expense. Such expenses might be:
Assessed costs: Estimated expenses depend on a ton of mystery. They attempt to discover what the costs will be, founded on specific variables. They are less exact as just past experience is considered basically while registering them.
Standard costs: Standard expense is a pre-decided cost dependent on a specialized gauge for material, work and different costs for a chose timeframe and for an endorsed set of working conditions. It is progressively logical in nature and the article is to discover what the expenses ought to be.
Answer:
Relationship with accounting period classifies cost in terms of their benefit and period of use.
The option (A) Historical Costs and Pre-Determined Costs. Under this, the revenue expenditure and capital expenditure is measured.
The revenue expenditure is associated with current period of account, while capital expenditure benefits beyond the stipulated accounting period.