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      Question

      When profits as per cost accounts differ from financial

      accounts, the difference may be due to:
      A Only cash transactions Correct Answer Incorrect Answer
      B Difference in overhead absorption Correct Answer Incorrect Answer
      C Errors in financial accounts only Correct Answer Incorrect Answer
      D Same accounting base Correct Answer Incorrect Answer

      Solution

      Major cause is over/under absorption of overheads and items recorded only in financial accounts (e.g., interest, income tax).

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