Which of the Following Statements Regarding Work in Process Is

question 38

Multiple Choice

Which of the following statements regarding work in process is not correct?

• A) Work in process is partially completed inventory.
• B) Work in process consists of direct labor, direct material, and manufacturing overhead.
• C) Work-in-Process Inventory is debited to record direct material used and direct labor incurred.
• D) Work-in-Process Inventory appears on the year-end balance sheet.
• E) Work-in-Process Inventory is credited when goods are sold.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balances and cost of goods sold at the end of an accounting period based on a physical count.

FIFO

An accounting method for valuing inventory that assumes the first items produced or bought are the first ones sold, standing for First In, First Out.

Weighted-Average Cost Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighted by the quantity of goods.

LIFO

Last In, First Out is a method of valuing inventory where the items that were most recently produced or purchased are the first ones to be used in the calculation of cost of goods sold.