Nexus Inc Uses a Process Costing System

question 34

Multiple Choice

Nexus Inc. uses a process costing system. It prepares a production cost report for each processing department. How will the managers of Nexus use these production cost reports to prepare the balance sheet at the end of an accounting period?

• A)to determine the amount of current liabilities of the period
• B)to determine the balance of inventory accounts
• C)to determine the cost of goods sold during the period
• D)to determine the amount of revenues generated during the period

---

Definitions:

Liabilities

The financial obligations or debts of a business entity, which are settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Resources owned or controlled by a business, individual, or entity that are expected to provide future economic benefits.

Accounting Equation

A fundamental financial principle representing the balance between a company's assets, liabilities, and equity.

Office Furniture

Tangible items such as desks, chairs, and filing cabinets that are used in an office environment.