Q43Historical cost accounting system results in more profits on paper that leads to various consequences of over statement of profits as more taxes and hence more bonus will be demanded by the employees etc.a.Both the mentioned points are neither a merit nor a demerit of HCAb.None of the given options are correctc.The above mentioned point is a demerit of HCAd.The above mentioned point is a merit of HCA

Option a is wrong because the mentioned point is a demerit of HCA. Option b is wrong because one…

Answered: Historical cost accounting system

Business

Accounting

Historical cost accounting system

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.10EX

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Q43

Historical cost accounting system results in more profits on paper that leads to various consequences of over statement of profits as more taxes and hence more bonus will be demanded by the employees etc.

Both the mentioned points are neither a merit nor a demerit of HCA

None of the given options are correct

The above mentioned point is a demerit of HCA

The above mentioned point is a merit of HCA

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