If Two or More Products Share a Common Process Before

question 11

Multiple Choice

If two or more products share a common process before they are separated,the joint costs should be assigned in a manner that

• A)assigns a proportionate amount of the total cost to each product on a quantitative basis.
• B)maximizes total earnings.
• C)minimizes variations in unit production costs.
• D)does not introduce an element of estimation into the process of accumulating costs for each product.

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Definitions:

Post-Closing Trial Balance

A list of all accounts and their balances after closing entries are made, showing only balance sheet accounts.

Temporary Accounts

Accounts that are closed at the end of each accounting period. These include revenue, expense, and dividend accounts.

Permanent Accounts

Accounts that carry their ending balances over to the next accounting period and are not closed out.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.