With a Lock-Box System

question 65

Multiple Choice

With a lock-box system:

• A) customers send their checks by mail directly to a post office box controlled by the company.
• B) the bank posts the deposits to the company's accounts receivable account.
• C) company personnel never touch the incoming cash.
• D) it takes more time for the cash to be deposited into the company's bank account.

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Definitions:

Direct Labour-Hours

The total man-hours expended by workers directly involved in the manufacturing process.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as indirect materials, indirect labor, and other factory-related expenses.

Job-Order Costing

A costing method used to determine the costs associated with manufacturing products individually or in batches, tracking the direct materials, direct labor, and manufacturing overhead per job.

Process Costing

It's an accounting methodology utilized in manufacturing where costs are assigned to products based on the processes they go through, often used for homogeneous items.