Companies That Would Benefit from Backflush Costing Include Companies

question 80

Multiple Choice

Companies that would benefit from backflush costing include companies:

• A)which have fast manufacturing lead times
• B)whose inventories vary from period to period
• C)companies that require audit trails
• D)Both A and B are correct.

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Definitions:

Bonds Payable

Long-term debt instruments issued by corporations or governments, promising to pay the bondholder a specified sum of money at future dates.

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are reported instead of adjustments to net income.

Sales Revenue

The total amount of money received by a company from selling goods or services before any expenses are deducted.

Balance Sheet Accounts

Accounts that are represented on the balance sheet, including assets, liabilities, and equity accounts.