For Which of the Following Businesses Would a Process Cost

question 176

Multiple Choice

For which of the following businesses would a process cost system be appropriate?

• A) boat repair service
• B) shampoo manufacturer
• C) dressmaker
• D) custom furniture manufacturer

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Definitions:

Accounting Equation

The foundation of double-entry bookkeeping, stating that assets are equal to the sum of liabilities and owner's equity: Assets = Liabilities + Owner's Equity.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing what the owners or shareholders own outright in the company.

Liabilities

Financial obligations a company owes to outside parties.

Assets

Resources owned by a business which are expected to provide future economic benefits, such as cash, inventory, property, and equipment.