Multiple Choice
Which account does a merchandising company use that a service company does not use?
31
views
4. Merchandising Operations
Service Company vs. Merchandising Company
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following differs between job costing and process costing?
A
The method of assigning costs to products
B
The requirement to record revenues
C
The use of financial statements
D
The need to track cash flows
Verified step by step guidance1
Understand the key difference between job costing and process costing: Job costing assigns costs to specific jobs or projects, while process costing assigns costs to processes or departments for mass production of similar items.
Analyze the options provided in the question. The correct answer should focus on the method of assigning costs to products, as this is the fundamental distinction between job costing and process costing.
Review the other options: Recording revenues, using financial statements, and tracking cash flows are common requirements for both job costing and process costing systems, so they are not the distinguishing factors.
Conclude that the method of assigning costs to products is the correct answer because it highlights the primary difference in how costs are allocated in job costing versus process costing.
Ensure clarity by summarizing that job costing is used for unique, customized jobs, while process costing is used for standardized, continuous production processes, emphasizing the difference in cost assignment methods.
Related Videos
Related Practice
Service Company vs. Merchandising Company practice set
Problem sets built by lead tutorsExpert video explanations