Q.Explain briefly the circumstances that led to the evolution and growth of cost accounting.

Cost accounting is developed to analyse and control cost — option (c).

Cost accounting is the branch of accounting that ascertains, analyses and controls the cost of products, jobs or services. Recording cost information (option d) is only the raw first step; the real reason the system exists is to break the recorded cost down (analyse) and then use that analysis to reduce waste and keep cost within limits (control).

• Analyse cost (a) and control cost (b) are each only half the purpose.

• Recording (d) is a routine input, not the developed objective.

• Hence the combined option (c) is the complete, correct statement.

Selling price is regulated by cost accounts — option (a).

One of the main uses of cost accounting in the CHSE Odisha +2 Commerce syllabus is price fixation. The selling price of a product is normally set as Total Cost + desired Profit margin. The total cost figure is supplied by the cost accounts (cost sheet), so it is the cost accounts that regulate the selling price.

• Cash accounts (b) only record receipts/payments.

• Sales accounts (c) record sales already made, not the basis of pricing.

• Profit & Loss account (d) shows overall result, not per-unit cost for pricing.

Cost accounting primarily records and analyses the actual costs incurred, so it is based on actual figures — option (b).

In +2 Class-12 Cost Accounting (CHSE Odisha, NCERT/CBSE-aligned), the recording of costs is fundamentally based on actual figures — the real expenditure on materials, labour and overheads as it is incurred (historical costing records cost after it is incurred). While cost accounting also uses estimates for budgeting and standard costing, the base of its records is the actual cost data. Estimated/projected figures are tools for planning, not the foundation of the records.

The primary object of cost accounting is to ascertain, analyse and control cost — option (d).

In this CHSE Odisha +2 Cost Accounting item:

• (a) ascertaining financial position and (b) operating results are objects of financial accounting.

• (c) declaring dividend is a company-law/management decision.

• (d) ascertaining, analysing and controlling cost is exactly what cost accounting is designed to do — determine the cost of each product/job/process, examine its elements, and help management keep costs under control.

Cost accounting is useful for ascertaining, analysing and controlling cost — option (d).

Cost accounting is the process of recording, classifying and analysing the cost of products or services so that management can control cost and fix prices.

So the correct, firm-level use of cost accounting is option (d).

Costing is the technique and process of ascertaining cost.

Costing refers to the classifying, recording and appropriate allocation of expenditure to determine the cost of a product or service, and the presentation of that information for the purpose of cost control and decision making. In short, it is the process by which the cost of anything is found.

The missing word is 'practice'.

Cost accounting is called a science because it is an organised body of knowledge with its own principles; an art because it requires skill and judgment to apply those principles; and a matter of practice because the cost accountant must apply this knowledge continuously and systematically over time to be effective.

The missing word is Cost.

In the +2 Class-12 Cost Accounting syllabus, cost is defined as the amount of expenditure (actual or notional) incurred on, or attributable to, a given thing — the resources sacrificed, expressed in money, to produce a product or render a service.