Which term is the process of analyzing and recording costs associated with producing goods or services?

• A. Audit trail
• B. Chart of Accounts
• C. Cost Accounting
• D. Budget Analysis

Answer: (C)

Cost accounting is the process of analyzing and recording all costs tied to producing goods or services. It collects direct costs like materials and labor and assigns indirect costs such as overhead to products, revealing cost per unit and total production cost. This information helps with pricing, budgeting, inventory valuation, and profitability analysis, and it supports decisions on process improvements and cost control. The audit trail is the documented path of transactions for verification, the chart of accounts is simply the list of accounts used to categorize financial data, and budget analysis compares actual results to planned figures rather than capturing and attributing production costs.