A Job Order Costing System Would Best Fit the Needs

question 156

Multiple Choice

A job order costing system would best fit the needs of a company that makes:

• A)Shoes and apparel.
• B)Paint.
• C)Cement.
• D)Custom machinery.
• E)Pencils and erasers.

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Definitions:

Accrued Wages

Wages that have been earned by employees but have not yet been paid by the company, representing a liability on the balance sheet.

Short-Term Lease

A lease for 12 months or less (including expected renewals and extensions) that does not contain a purchase option that the lessee is expected to exercise.

Lease Liability

An obligation representing future lease payments owed by a lessee under the terms of a lease agreement.

Bargain Purchase Option

A clause in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than the expected fair market value.