Which of the Following Statements Is Not Correct

question 62

Multiple Choice

Which of the following statements is not correct?

• A)Cash purchases of merchandise are not recorded in the purchases journal.
• B)The Purchases account has a normal debit balance.
• C)The invoice date and credit terms must be carefully recorded in the purchases journal because they determine when payment is due.
• D)A credit purchase of equipment for use in the business would be recorded in the purchases journal.

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Definitions:

Process Costing

A costing method used for homogenous products, allocating costs based on the processes or departments through which goods are manufactured.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the process of being manufactured into finished goods.

Costs Added

Additional costs incurred during a production process or project phase, including materials, labor, and overhead expenses that were not initially anticipated.

Cost Reconciliation

The process of verifying the amount of costs in various accounts and reports, ensuring consistency and accuracy across financial records.