Although Optional, a Reversing Entry Is Usually Made for Adjusting

question 38

True/False

Although optional, a reversing entry is usually made for adjusting entries that accrue expenses to be paid in the next accounting period.

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Definitions:

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the expenses incurred to convert raw materials into finished products.

FIFO Method

The First-In, First-Out method, an inventory valuation strategy where goods first added to inventory are the first ones to be sold.

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and the cost of goods sold based on the average cost of all units available for sale during the period.

Equivalent Units

A concept in cost accounting that converts partially completed goods into a number of completed units for inventory valuation.