Equivalent Units of Production for a Process Costing System Using

question 61

Multiple Choice

Equivalent units of production for a process costing system using the first-in, first-out method are equal to:

• A) Units completed during the period + Equivalent units in the ending work in process inventory.
• B) Units transferred out + Equivalent units in ending work in process inventory + Equivalent units in beginning work in process inventory.
• C) Units started and completed during the period + Equivalent units in the ending work in process inventory.
• D) Units completed during the period and transferred out.

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Definitions:

Journal Entries

The method by which transactions are recorded in the general ledger in the form of debits and credits according to accounting rules.

Voucher

A voucher is a document that authorizes a payment and records details about it, acting as proof of the transaction for accounting purposes.

Net Method

An accounting practice where discounts for early payment are considered directly in the invoice price, reducing the recorded sale and purchase amounts if the discount is taken.

Periodic Inventory System

An alternative phrasing for the Periodic Inventory Method, emphasizing it as a system of managing and accounting for inventory in discrete time periods, typically annually.