Question

Which of the following costing activities is associated with the financial accow1ting system?

a. determining the cost of goods sold for financial statements
b. determining the cost of a customer
c. preparing budgets
d. determining the cost of a department

Answer 1

The costing activity associated with the financial accounting system is a. determining the cost of goods sold for financial statements. This involves calculating the profit and loss for a business.

Step-by-step explanation:

The costing activity associated with the financial accounting system is determining the cost of goods sold for financial statements. This is an essential part of the financial accounting process as it helps in calculating the profit and loss for a business. By deducting the cost of goods sold from the revenue, the financial statement can show the net income or loss.

For example, if a company sells a product for $100 and it costs $60 to produce that product, the cost of goods sold is $60. By subtracting the cost of goods sold from the revenue, the financial statement will show a net income of $40.