Which of the Following Statements Is True of a Backflush

question 46

Multiple Choice

Which of the following statements is true of a backflush costing system?

• A) All costs are tracked sequentially as products pass through each stage of production.
• B) When inventories are minimal, as in JIT production systems, backflush costing complicates costing systems.
• C) Usage of a backflush costing system can result in incomplete accounting records.
• D) Backflush costing increases the ability of the accounting system to pinpoint the uses of resources at each step in the production process.

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Definitions:

Acquired Material

Items or substances that are obtained or collected for use, often referring to resources gathered for a specific project or purpose.

Liabilities

Anything to which a person is liable, responsible, legally bound; debts or accounts payable (A/P) owed by the business.

Accounts Payable

The amount of money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Invoice Description

A detailed statement showing goods sold or services provided, their prices, and the total amount to be paid.