Cost Accounting Controls Are Those Related to the Physical Inventory

question 12

Multiple Choice

Cost accounting controls are those related to the physical inventory and the consequent costs from the point at which:

• A) the customer's order is received until the finished product is shipped.
• B) raw materials are requisitioned until the finished product is completely manufactured.
• C) raw materials are requisitioned until the finished product is sent to storage.
• D) materials are ordered for purchase until the finished product is sold.

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Definitions:

Net Cash Flows

is the total amount of money being transferred into and out of a business, indicating its financial health.

Initial Cost

The purchase price of a fixed asset plus all costs to obtain and ready it for use.

Cash Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, based on the cash inflows generated by the investment.

Net Cash Inflows

The difference between all cash received and all cash payments over a period, reflecting the net change in cash position.