When Using a Standard Costing System,which of the Following Should

question 2

Multiple Choice

When using a standard costing system,which of the following should be recorded when recording the purchase of direct materials?

• A)Debit raw materials inventory at the standard price and credit accounts payable at the standard price
• B)Debit raw materials inventory at the standard price and credit accounts payable at the actual price with a debit or credit to direct materials price variance
• C)Credit raw materials inventory at the standard price and debit accounts payable at the actual price with a debit or credit to direct materials price variance
• D)Credit raw materials inventory at the standard price and debit accounts payable at the standard price

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Definitions:

Financial Reports

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Comparability

An accounting principle that enables the financial information of a company to be compared over different periods and with other companies, enhancing the usefulness of financial statements.

Government Business Enterprise

A government business enterprise is a type of public sector entity that is commercially oriented and operates with an aim to produce goods or services for the market, potentially recovering its total costs.

Equity Method

An accounting technique used to record an investor's proportional share of an associate company's net income or losses, reflecting the economic interest in the associate.