Depending on the Nature of Rework Being Done on a Particular

question 41

Multiple Choice

Depending on the nature of rework being done on a particular unit, the cost can be charged to one of three specific accounts.Which of the following is correct?

• A)Abnormal rework is charged to a Loss from Abnormal Rework account.
• B)Abnormal rework is charged to the Work-in-Process Inventory account.
• C)Normal rework for a particular job is charged to that specific job's Finished Goods Inventory account.
• D)Normal rework common to all jobs is charged to the Work-in-Process Inventory account.
• E)Normal rework common to all jobs is charged to a Loss from Normal Rework account.

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Definitions:

Ending Inventory

Ending inventory is the total value of all products, raw materials, and finished goods that are not sold at the end of an accounting period.

LIFO Perpetual

An inventory valuation method where the last items added to inventory are assumed to be the first sold, updated continuously throughout the accounting period.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company.

FIFO Perpetual

A method of inventory valuation where goods are recorded and sold based on the order they were received, continually updating the inventory ledger.