Controls Which Provide a Means of Ensuring That the Physical

question 136

Multiple Choice

Controls which provide a means of ensuring that the physical counts are properly summarized, priced at the same amount as the unit records, correctly extended and totaled, and included in the general ledger at the proper amount are known as

• A) standard cost controls.
• B) pricing internal controls.
• C) compilation internal controls.
• D) count quantity internal controls.

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Definitions:

Process Cost Systems

An accounting method used to track and assign production costs to products based on processes or departments, typical in industries that manufacture homogeneous products.

Total Manufacturing Costs

The aggregate of all costs involved in the production of a product, including direct labor, materials, and overhead.

Direct Materials

Raw materials directly used in the production of goods, whose costs are easily traced to the finished product.

Underapplied Overhead

A situation in which overhead assigned to work in process is less than the overhead incurred.