Multiple Choice
Which of the following best describes how prepaid expenses are adjusted at the end of an accounting period?
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3. Accrual Accounting Concepts
Introduction to Adjusting Journal Entries and Prepaid Expenses
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In process costing, a separate Work in Process account is maintained for each:
A
customer order
B
finished goods batch
C
individual job
D
production department or process
Verified step by step guidance1
Understand the concept of process costing: Process costing is a method used in industries where production is continuous, and the products are indistinguishable from one another. Examples include industries like chemicals, textiles, and food processing.
Recognize the role of Work in Process (WIP) accounts: In process costing, Work in Process accounts are used to track the costs associated with partially completed goods at different stages of production.
Identify the correct categorization: Since process costing deals with continuous production, a separate Work in Process account is maintained for each production department or process, not for individual jobs, customer orders, or finished goods batches.
Clarify why other options are incorrect: Customer orders and individual jobs are tracked using job order costing, which is a different costing method. Finished goods batches are tracked in the Finished Goods account, not in Work in Process accounts.
Conclude with the correct answer: The correct answer is that a separate Work in Process account is maintained for each production department or process in process costing.
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