Materials Are Added at the Beginning of the Process

question 56

Multiple Choice

Materials are added at the beginning of the process. The beginning work in process is 30% complete. The total equivalent units for direct materials for the period using FIFO is equal to

• A) The units in beginning work in process
• B) The units started this period
• C) The units started plus 70% of the units in beginning work in process
• D) The units started and completed plus the beginning work in process

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Allowance

An accounting practice that reduces the value of assets or income for the purpose of conservative financial reporting and tax savings.

Percentage of Receivables Method

The percentage of receivables method is an accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on past experience.

Allowance for Doubtful Accounts

An accounting concept representing the estimated uncollectible amounts from customers' outstanding accounts.