Cost Accounting Controls Are Those Related to the Physical Inventory

question 2

Multiple Choice

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

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

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Definitions:

Income Summary

An account used in the closing process that aggregates all income and expenses to determine the net income or loss for the period.

Merchandise Inventory

The goods a company has available for sale to customers, considered a current asset on the balance sheet.

Adjustments

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

Worksheet

An informal document used by accountants to prepare adjusting journal entries and to support the preparation of financial statements.