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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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